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CORNELL LAW LIBRARY 








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Cornell University Library 
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Library 



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http://www.archive.org/details/cu31924018827349 



COMMENTARIES 



ON THE 



LAW OF CONTRACTS 



BEING A CONSIDERATION 

OF THE NATURE AND GENERAL PRINCIPLES OF THE 

LAW OF CONTRACTS AND THEIR APPLICATION 

IN VARIOUS SPECIAL RELATIONS 



BY 
WILLIAM R ELLIOTT 

CO-AUTHOR OF 
"ROADS AND STREETS." "RAILROADS," "EVIDENCE," 

ASSISTED BY THE PUBLISHERS' EDITORIAL STAFF 



IN SEVEN VOLUMES 

Volume IV 



INDIANAPOLIS 

THE BOBBS-MERRILL COMPANY 

PUBLISHERS 



copyright 1915 
By The bobbs-Merrill company 



TABLE OF CONTENTS 

VOLUME FOUR. 



AGENCY TO DEEDS 



TITLE ONE 

AGENCY 



CHAPTER LIX. 

GENERAL PRINCIPLES EXECUTION OF CONTRACT BY AGENT. 

SECTION. PAGE. 

2830. Introductory 1 

2831. Definition ' 2 

2832. Constituent or essential elements 3 

2833. General and special agents •. . . . 3 

2834. Authority — How executed by agent — Generally 4 

2835. Mere descriptive words insufficient to bind principal and exonerate 

agent 5 

2836. Exception to doctrine of descriptio personarum in case of bank 

officers and public agents 6 

2837. Construction of simple contracts — Intention of parties 6 

2838. Negotiable instruments 8 

2839. Extrinsic evidence to explain negotiable instruments — Conflicting 

decisions 9 

2840. Construction taking into consideration body of instrument and 

signature alone — Illustrative cases 10 

2841. Construction considering recitals, together with signatures, head- 

ings, marginal notes or seals 14 

2842. Ambiguity in instruments — Parol evidence held admissible 16 

2843. Cases in which parol evidence was excluded 19 

2844. Principal held liable in equity 21 

2845. Difference in rule as to negotiable instruments when question is be- 

tween original parties from that when in hands of innocent third 
party 21 

2846. Summary of the most approved doctrine as to negotiable instru- 

ments 23 

2847. Sealed instruments — Execution by agent 25 

2848. Consequences of defective execution 27 

2849. Undisclosed principal — Parol evidence to hold liable 23 

iii 



IV TABLE OF CONTENTS. 

CHAPTER LX. 

ATTORNEYS AT LAW. 
SECTION. PAGE. 

2855. Attorneys — Attorneys at law « 30 

2856. Attorneys in fact 31 

2857. General relation of attorney and client — The retainer 31 

2858. Authority of attorney to appear — By whom, how, and when it may 

be questioned 33 

2859. When and how far client is bound by act of attorney 35 

2860. Duty of attorney to client — Confidential communications 36 

2861. Attorney's duty to exercise skill and care — Liability for negligence. 37 

2862. Attorney's knowledge and skill considered with reference to lo- 

cality 39 

2863. Attorney's liability for negligence 40 

2864. Duty of attorney to obey instructions 42 

2865. Duty of attorney to account and pay over 43 

2866. Compensation of attorney 44 

2867. Attorney's lien 47 

2868. Attorneys in fact — Power of attorney 50 

CHAPTER LXI. 

AUCTIONEERS. 

2870. Auctioneers — Definition and description 52 

2871. Auctioneer's authority 53 

2872. Statute of frauds — Memorandum 54 

2873. Conduct of auction sale 56 

2874. Conduct of sale — Chilling bids — Pufiing and by-bidding 58 

2875. When contract is made — Acceptance of bid 60 

2876. Nature of contract — Separately accepted bids 60 

2877. Rights, liabilities, and remedies of buyer and seller 61 

2878. Auctioneer's duties and liabilities to the vendor 64 

2879. Auctioneer's duties and liabilities to purchaser 65 

2880. Liabilities of auctioneer to third persons — Sale of stolen goods. ... 66 

2881. Auctioneer's compensation 67 

2882. Auctioneer's lien 68 

CHAPTER LXII. 

BANK AND OTHER CORPORATION OFFICERS. 

2885. Generally — Authority express or implied — Judicial notice 69 

2886. Relation of officers to corporation and to one another — Dealing 

with corporation 69 

2887. General rules as to authority to bind corporation 71 

2888. Directors 72 

2889. President— Manager 74 



TABLE OF CONTENTS. V 
SECTION. p^gj._ 

2890. Vice-president •]■] 

2891. Secretary 7g 

2892. Treasurer 7g 

2893. The cashier 79 

2894. Tellers ^ ' ^ ' ^ ^ ^ ^ !''!!!"! ^ !!"!"!!!! ^ !!! ! 82 

2895. Other officers and agents— Miscellaneous 83 

CHAPTER LXIII. 

FACTORS AND BROKERS. 

2900. Factors and brokers— Definition and distinction 86 

2901. Authority — How conferred 87 

2902. Extent of authority — Usage 88 

2903. Implied and particular authority of factors 89 

2904. Implied and particular authority of brokers 91 

2905. Relation between principal and factor or broker — General obliga- 

tions of factors and brokers to principal 93 

2906. Duties and obligations of brokers and factors to principals 94 

2907. Rights and remedies of broker as against principal — Compensation 

— Real estate brokers 96 

2908. Obligations of principal to factor — Lien of factor 101 

2909. Liability of principal to third parties 103 

2910. Rights and remedies of factor against third parties 106 

2911. Rights and remedies of principal as to third parties 108 

2912. Del credere factors Ill 

CHAPTER LXIV. 

TRAVELING SALESMEN. 

2915. Generally — Distinguished from pedlers and hawkers — Licenses 113 

2916. Duties and powers of traveling salesmen generally — No power to 

receive payment 115 

2917. No implied authority to take back or exchange 116 

2918. Rejection or acceptance of agent's act 117 

2919. Necessary expenses — Sale of samples 117 

2920. Drummer's samples not ordinary baggage — Contracts and custom 

as to carriage 118 

CHAPTER LXV. 

EVIDENCE IN AGENCY CASES. 

2925. Agency or authority — Question of law or fact — Burden of proof. . 120 

2926. Authority of agent — How proved — Parol evidence — Seal 121 

2927. Evidence of agency — Circumstantial evidence 122 

2928. Agency inferred from relation of parties 123 



VI TABLE OF CONTENTS. 

SECTION. PAGE. 

2929. Habit and course of dealing 124 

2930. Course of dealing — Acts of agent in other transactions 125 

2931. Declarations and admissions of agent 126 

2932. Admissions of principal 127 

2933. Notice to agent as notice to principal 128 

2934. Ratification 129 

2935. Revocation and termination of agency 132 



TITLE TWO 

ARBITRATION AND AWARD 



CHAPTER LXVI. 

ARBITRATION. 

2940. Scope 134 

2941. Agreements for submission, effect and necessity 137 

2942. Manner and form of submission 140 

2943. What may be submitted 142 

2944. Who may submit to arbitration 145 

2945. Requisites of submission 151 

2946. Amendment of submission 153 

2947. Revocation of submission 154 

2948. Eifect of submission 159 

2949. Construction of submission 160 

2950. Who may be arbitrators 162 

2951. Appointment and oath 164 

2952. Authority and power of arbitrators 166 

2953. Compensation and liability of arbitrators 169 

2954. Proceedings before arbitrators in general — Presence at meetings.. 170 
.2955. Right to hearing before arbitrators — Extent of right 172 

2956. Time and place of hearing before arbitrators 173 

2957. Notice to parties of meetings of arbitrators 174 

2958. Conduct of hearing by arbitrators — Witnesses and evidence 176 

2959. Manner of reaching decision by arbitrators — Unanimity 179 

2960. Umpire— Method of appointment 181 

2961. Umpire— His authority 183 



TABLE OF CONTENTS. VU 

CHAPTER LXVII. 

AWARD. 
SECTION. PAGE. 

2962. Time of making award 186 

2963. Form and requisites of award — Publication 187 

2964. Mutuality of award 191 

2965. Certainty of award 192 

2966. Conformity of award with submission 196 

2967. Further of conformity of award to scope of submission 198 

2968. Finality of award 201 

2969. Completeness of the award 203 

2970. Consistency of award — Possibility of performance — Reasonable- 

ness — Entirety 204 

2971. Partial invalidity of award 205 

2972. Correction and reformation of award 207 

2973. Recommitment of award 207 

2974. Ratification and repudiation of award 209 

2975. Construction of award 210 

2976. Parol evidence to vary or explain award — Arbitrators as witnesses 211 

2977. Conclusiveness of award when unimpeached, and effect upon cause 

of action 214 

2978. Costs of arbitration 218 

2979. Impeachment of award — Grounds 220 

2980. Impeachment of award — Method 225 

2981. Performance of award 228 

2982. Enforcement of award 230 



TITLE THREE 

BAILMENTS 



CHAPTER LXVni. 

DEFINITIONS AND GENERAL PRINCIPLES. 

2985. Definition of bailment 235 

2986. Character of the relation 236 

2987. Origin of the law of bailment 237 

2988. Classification of bailments 238 

2989. The consideration which supports the contract 239 

2990. Principles common to all bailments, and subject-matter of a bail- 

ment 240 

2991. Parties to a bailment 240 



Vlll TABLE OF CONTENTS. 

SECTION. PAGE. 

2992. Delivery and acceptance of the property 241 

2992!. Possession of the property 243 

2994. Bailor's title and rights 243 

2995. Bailee's estoppel to deny bailor's title 244 

2996. Bailee's rights against third parties 245 

2997. Bailee's rights to use of property^Conversion 246 

2998. Expenditures upon property bailed 247 

2999. The bailor must not expose the bailee to danger 247 

-3000. Care to be taken of property bailed 248 

3001. Bailee must act in good faith 250 

3002. Effect of special contract 251 

3003. Compound or mixed bailment 251 

3004. Redelivery 251 

3005. Termination of relation 252 

3006. Form of action and burden of proof 254 

3007. Distinction between bailment, and debt, sale, or gift 255 

CHAPTER LXIX. 

GRATUITOUS BAILMENTS. 

3010. For benefit of bailor — Defined and distinguished 258 

3011. Mandates 259 

3012. Deposits 259 

3013. Delivery and acceptance 260 

3014. Use of the property and expenses 261 

3015. Bailee's duty to perform bailment contract 261 

3016. Care to be used by bailee in accomplishing the bailment purpose. . 262 

3017. Effect of failure to obey instructions, or to give special care with 

notice that such is necessary 264 

3018. Bailee's rights against bailor or third parties 265 

3019. The finder of lost property 266 

3020. Special bank deposits 266 

3021. Termination of relation and redelivery 267 

3022. For benefit of bailee — Gratuitous loans — The commodate 268 

3023. Creation of the relation 269 

3024. Bailee's rights and obligations 269 

3025. Bailor's rights and duties 270 

3026. The care demanded of the bailee 271 

3027. Redelivery 272 

CHAPTER LXX. 

PLEDGES 

3030. What is a pledge 273 

3031. Pledge distinguished from chattel mortgage and lien 274 

3032. Essentials of the relation 275 



TABLE OF CONTENTS. IX 

SECTION. PAGE. 

3033. What debt may be secured 275 

3034. What may be pledged 276 

3035. Title necessary to pledge goods 277 

3036. Delivery in pledge 279 

3037. Constructive delivery 281 

3038. Certain kinds of constructive delivery not good as to creditors 281 

3039. Delivery of negotiable instruments in pledge 283 

3040. Pledge of corporate stock 284 

3041. Delivery of bills of lading, and other quasi-negotiable papers 286 

3042. Pledgee's right to possession of pledge 287 

3043. Pledgee's right to use — Expenses and profits 288 

3044. Care demanded of pledgee — Collection of negotiable paper 289 

3045. Pledgee's right to assign pledge 290 

3046. Conversion by pledgee 290 

3047. The pledgor's warranty of title to the pledge 291 

3048. Pledgor's right to assign subject to pledge 292 

3049. Pledgor's right to sue third parties 292 

3050. The pledgor's right to redeem 293 

3051. Termination of the relation by the pledgor 294 

3052. Termination by consent of parties or operation of law 294 

3053. Redelivery 296 

3054. Pledgee's remedies upon pledgor's default 296 

3055. Suit on the debt 296 

3056. Common-law sale of the pledge 297 

3057. Sale in equity 298 

3058. Sale under statute 299 

3059. Sale under the provisions of a special contract 299 

3060. Further of pledgee's rights in case of default — Where pledge is 

chose in action or corporate stock 300 

3061. Pledgor's rights in case of default, or in case of pledgee's wrong. . 301 

3062. Rights of purchaser at pledgee's sale 302 

CHAPTER LXXI. 

CONTRACTS OF HIRING. 

3070. Contracts of hiring 303 

3071. Contracts of hiring the use of a thing 304 

3072. Creation of the relation 305 

3073. Bailor's duties and rights — Warranty of title and disclosure of 

defects 305 

3074. Bailee's right to possession and use 306 

3075. Care demanded of hirer — Expenses 307 

i 3076. Bailee's misuse and conversion 309 

3077. Third persons and subusers 312 

3078. Assignability of bailee's rights 314 

3079. Special classes of hiring the use of a thing— Property for ex- 

hibition 314 



X TABLE OF CONlX.Sii. 

SECTION. PAGE. 

3080. Special classes — Storekeeper or bath-house keeper as hired bailee 

of personal belongings of customer or patron 315 

3081. Termination of the contract of hiring — Redelivery and recompense 316 

CHAPTER LXXII. 

CONTRACTS OF HIRING SERVICES ABOUT A THING. 

3085. Contracts of hiring services about a thing — Operis bailments. . 320 

3086. Creation of the relation 321 

3087. Title and accession — Bailee's special property 321 

3088. Diligence and skill required of bailee 323 

3089. Expenses and insurance 326 

3090. Compensation — Where work incomplete 326 

3091. Compensation — Where work completed, but not according to 

contract 328 

3092. Bailee's lien for amount of compensation 329 

CHAPTER LXXni. 

CONTRACTS OF HIRING THE CUSTODY OF A THING. 

3095. Bailments of hired custody 333 

3096. Warehouseman defined — Public and private warehouseman 333 

3097. Delivery and acceptance — Commencement of liability 334 

3098. Warehouse receipts — Their effect and assignability 335 

3099. Warehouse receipt as a contract — Its effect in limiting liability. . 337 

3100. Duties and liabilities of warehouseman 339 

3101. Further of the warehousing relationship — Warehouseman's lien.. 341 

3102. Redelivery — Presumption in case of injury to goods — Termina- 

tion of relation 342 

3103. Wharfingers 343 

3104. Factors and commission merchants 343 

3105. Safe-deposit companies 344 

3106. Public officers as bailees 345 

3107. Other bailments for custody — Agisters and livery stable keepers.. 346 

CHAPTER LXXIV. 

INNKEEPERS AND THE POST-OFFICE. 

3110. Innkeepers as extraordinary bailees for custody 347 

3111. Who are innkeepers 348 

3112. Who is a guest — Transient character of the relationship 350 

3113. A guest must receive accommodations of the inn as such 352 

3114. Innkeeper's duty to receive all comers 354 

3115. Innkeeper's liability for the goods of his guests 355 

3116. For what goods innkeeper is liable 357 



TABLE OF CONTENTS, XI 
SECTION. PAGE. 

3117. Limitation of liability 358 

3118. Innkeeper's liability for the safety and protection of his guests.. 360 

3119. Innkeeper's lien 361 

3120. Termination of relation 362 

3121. Innkeeper as ordinary bailee 363 

3122. The post-office department as bailee 364 

CHAPTER LXXV. 

CARRIERS OF GOODS SUBJECT DEFINED AND DISTINGUISHED. 

3 125. Contract of carriage a bailment 366 

3126. Common carrier defined 367 

3127. Private carriers 368 

3128. Distinctions between public and private carriers 368 

3129. Further of distinctions — Exceptions to rules 370 

3130. Further of elements necessary to constitute common carrier 370 

3131. Kinds of common carriers with reference to means of trans- 

portation 372 

3132. Who are not common carriers 374 

3133. Common carrier's extraordinary liability as bailee 375 

CHAPTER LXXVI. 

CREATION OF RELATION OF COMMON CARRIER, AND BEGINNING OF 

LIABILITY. 

3140. Duty to receive goods offered 377 

3141. Time of delivery to carrier 377 

3142. Place of delivery 379 

3143. By whom delivery must be made 379 

3144. To whom delivery must be made 380 

3145. Constructive delivery 381 

3146. Completion of delivery and acceptance by carrier 382 

3147. Notice to carrier of delivery 383 

3148. Delivery to connecting carrier 385 

3149. Carrier's duty to accept 385 

CHAPTER LXXVII. 

BILLS OF LADING. 

3155. What a bill of lading is 388 

3156. Dual capacity of bill of lading as receipt and contract 389 

3157. Authority to give bill of lading 389 

3158. Operation of bill of lading as receipt 390 

3159. Recitals in bill of lading as to condition or character of goods 

received 391 



Xn TABLE OF CONTENTS. 

SECTION. PAGE. 

3160. Bill of lading as a contract 392 

3161. Conflict between bill of lading and parol contract 393 

3162. Mutual assent 394 

3163. Transfer of title to goods by transfer of bill of lading 395 

3164. Bill of lading as evidence of title 39/ 

3165. Bill of lading with draft attached 399 

CHAPTER LXXVIII. 

DUTIES AND LIABILITIES OF CARRIER. 

3170. Duty to carry for all 401 

3171. In general of duties implied in carrier's contract 401 

3172. Duty to fui-nish sufficient accommodations 402 

3173. Duty to furnish suitable accommodations 404 

3174. Duty to furnish cars suitable to particular classes of freight 405 

3175. Duty to show no preference 406 

3176. Duty as to manner of carriage 408 

3177. Duty to obey shipper's directions 409 

3178. Carrier must choose safest route where more than one 410 

3179. Special duties arising under special contract — Effect of deviation 

from contract 411 

3180. Construction of clauses permitting delay or deviation 411 

3181. Contracts to carry within certain time 412 

3182. Care of goods in emergencies 413 

3183. Carrier's liability for loss 415 

3184. Duration of extraordinary liability 415 

3185. Extent of carrier's liability 415 

3186. What is considered act of God 416 

3187. Carrier's exposure to danger — Deviation from route 418 

3188. Where accident would not have happened save for delay 418 

3189. Burden of proof 420 

3190. What may be act of public enemy 420 

3191. What is meant by loss caused by public authority 421 

3192. Loss caused by act of shipper 422 

3193. Loss caused by inherent nature of the goods 422 

3194. Statutory exceptions to carrier's liability 423 

3195. Liability for delay 423 

3196. Special circumstances may increase duty not to delay 424 

3197. Excuses for delay 425 

3198. Duty to delay under some circumstances 426 

CHAPTER LXXIX. 

LIMITATION OF LIABILITY BY CONTRACT. 

3205. In general 427 

3206. Limitation of liability by notice 428 



TABLE OF CONTENTS. XIU 
SECTION. PAGE. 

3207. Essentials of the contract 429 

3208. What is a special contract 430 

3209. Contract may be in parol 431 

3210. Notices informing of carrier's regulations 432 

3211. To be effectual the terms of limitation must be part of contract. . 432 

3212. Receipt must be delivered when goods accepted 433 

3213. Character of limitations 434 

3214. Limitation of amount of liability 435 

3215. Effect in case of abandonment or completion of contract 438 

3216. Limitation of time in which claim for loss must be made 439 

3217. When limitation does not apply — Waiver 441 

3218. Condition precedent and burden of proof i, 442 

3219. Effect of contract limitations in case of negligence 443 

3220. Authority of shipper's or carrier's agent to limit liability 444 

3221. Construction of contracts limiting liability 445 

3222. Construction of exceptions found in bills of water carriers 448 

3223. Act of carrier which prevents taking advantage of contract limita- 

tions—Deviation or departure from contract 449 

3224. When connecting carrier obtains benefit of contract made by initial 

carrier • • 450 

3225. What law governs construction of contract limiting carrier's 

liability 450 

3226. Consideration for contract limiting liability 452 

CHAPTER LXXX. 

THE carrier's RIGHTS. 

3230. Compensation 454 

3231. On what goods entitled to freight 455 

3232. Amount of compensation 456 

3233. Shipper's rights if charges unreasonable 456 

3234. Carrier's rights in case of fraud by shipper 456 

3235. Who must pay the freight 457 

3236. Method of calculating compensation 458 

3237. Freight pro rata itineris 458 

3238. Method of calculating freight pro rata itineris 460 

3239. Transhipment at rate different from original rate agreed upon 461 

3240. When carrier's right to sue accrues 461 

3241. Demurrage 462 

3242. Construction of special clauses in demurrage contracts 463 

3243. Demurrage where contract is silent as to time of unloading 464 

3244. Cesser clause and lien for demurrage 466 

3245. Demurrage as applied to railroads 466 

3246. Charges for special services 467 

3247. Discrimination in freight charges 468 

3248. Carrier's special property in goods, and general rights as bailee. . 469 

3249. When subrogated to owner's rights 470 



XIV TABLE OF CONTENTS. 

SECTION. PAGE. 

3250. Right to insure 470 

3251. Authority to sell 471 

3252. Right to know character of goods offered for carriage 472 

3253. Shipper's failure to deliver 473 

3254. The carrier's lien 473 

CHAPTER LXXXI. 

TERMINATION OF THE RELATION OF CARRIER. 

3260. Termination of the relation of carrier 478 

3261. Delivery to right person 479 

3262. Place of delivery 482 

3263. Where goods are shipped to a certain place 483 

3264. Delivery as warehouseman 483 

3265. Deh very by water carriers 484 

3266. Delivery by railroads 487 

3267. Massachusetts rule 487 

3268. New Hampshire rule 488 

3269. New York rule 489 

3270. When notice unnecessary or immaterial 489 

3271. When liability as warehouseman begins 490 

3272. Liability as warehouseman • 491 

3273. Delivery by express companies 492 

3274. Further of delivery — Notice to consignor 492 

3275. Carrying goods C. O. D 493 

3276. Consignee's rights as to C. O. D. shipments 494 

3277. Excuses for non-delivery — Seizure under legal process 495 

3278. Stoppage in transitu 497 

3279. Receipt for dehvery 499 

3280. Delivery to connecting carrier and liability of connecting carrier 

— In general •. . 500 

3281. Who is a connecting carrier 501 

3282. Contract for through carriage 502 

3283. Authority to make through contract 504 

3284. Which carrier is liable to consignee 505 

3285. Compensation of connecting carriers 507 

3286. Delivery to connecting carriers 508 

CHAPTER LXXXn. 

CARRIERS OF LIVE STOCK. 

3290. Carriers of live stock in general 512 

3291. Duty to carry 513 

3292. Place of reception 513 

3293. Carrier's duty as to accommodations 514 

3294. Loading and unloading 514 



TABLE OF CONTENTS. XV 

3295. Care of the stock in transit 515 

3296. Liability for loss or delay 517 

3297. Special contract and limitation of liability 518 

3298. Statutory regulation 519 

3299. Termination of relation and delivery 520 

3300. Delivery to connecting carrier 521 

CHAPTER LXXXIII. 

CARRIERS OF PASSENGERS. 

3305. Defined and distinguished 523 

3306. Kinds of passenger carriers 524 

3307. Who must be carried 526 

3308. Creation of relation— Offer to become passenger 527 

3309. Acceptance by carrier 528 

3310. Duties of carrier toward passenger 532 

3311. Carrier's duty as to accommodations 533 

3312. Duty to protect passengers from third persons 536 

3313. Violation of carrier's duties toward passenger considered as breach 

of contract, or as tort 537 

3314. Carrier's rules and regulations 538 

3315. Ejection for failure to comply with regulations, or because of 

faulty ticket 539 

3316. Carrier's right to compensation 541 

3317. Ticket as a contract 542 

3318. Conclusiveness of ticket 544 

3319. Loss of ticket 545 

3320. Stop-over privileges 546 

■3321. Time limitations 548 

3322. Transfer of tickets — Nontransferable tickets 549 

3323. Excursion tickets and round-trip tickets 550 

3324. Mutilated tickets — Showing ticket before admission to train 551 

3325. Transfers 551 

3326. Limitation of liability by contract — Where one travels on pass. .. . 553 

3327. Limitation of liability where fare paid 555 

3328. Termination of relation of carrier and passenger 556 

3329. Duty to stop at stations, to announce stations, to conform with 

schedules, and to give passenger proper instructions 557 

3330. Sleeping and parlor-car companies 559 

3331. Sleeping-car tickets 560 

3332. Carriers of passengers by water 561 

3333. Liability for baggage of passengers 561 

3334. What is baggage 563 

3335. Personal baggage 563 

3336. Merchandise carried as baggage 565 

3337. Limitation of liability for baggage 567 

3338. Baggage checks and limitation of liability by ticket 567 

3339. Carrier's lien on baggage 570 



XVI TABLE OF CONTENTS. 

TITLE FOUR 

BILLS AND NOTES 



CHAPTER LXXXIV. 

DEFINITIONS AND GENERAL OBSERVATIONS. 
SECTION. PAGE. 

3350. Definitions of a bill of exchange 571 

3351. Foreign and inland bills of exchange 572 

3352. Definitions of a promissory note 573 

3353. Form and negotiability of a promissory note 574 

3354. Analogy between bills and notes ■ • 574 

3355. Meaning of the law merchant 575 

3356. Instruments governed by the law merchant ■ ■ 575 

3357. Negotiability in general 576 

3358. Assignability in general 577 

3359. Duration and extent of negotiability 578 

3360. Quasi-negotiable instruments 579 

CHAPTER LXXXV. 

THE CONTRACT. 

3365. Nonnegotiable instruments 582 

3366. Forms and requisites of bills and notes 583 

3367. Instrument must be in writing 584 

3368. Date not essential to validity or negotiability 584 

3369. Effect of date in general 584 

3370. Antedating and postdating instruments 585 

3371. Designation of parties 586 

3372. Same — Designation of parties 587 

3373. Designation of payee 589 

3374. Designation of drawee 591 

3375. Necessity for order or promise to pay 592 

3376. Order or promise must be unconditional 592 

3377. Provision for payment of money 593 

3378. Provision for attorney's fees and costs of collections 594 

3379. How money designated 595 

3380. The amount must be certain 596 

3381. Time of payment must be certain 597 

3382. Designating place of payment 599 

3383. Words importing negotiability 599 

3384. Words expressing consideration 600 

3385. Signature, necessity, form and position of 601 

3386. Seal— Necessity for and effect 602 



TABLE OF CONTENTS. Xvii 

SECTION. PAGE. 

3387. Filing blanks ; 602 

3388. Contemporaneous agreements 604 

3389. Conflict of law 60S 

3390. Law of place of contract governs 607 

3391. The original contract of the drawer 608 

3392. Contract of drawee 610 

3393. Contract of maker 611 

3394. Contract of guarantor 612 

3395. Contract of surety 613 

3396. Contract of irregular or anomalous indorser 613 

3397. Capacity of parties to contract 615 

3398. Delivery of instrument 616 

3399. Consideration, necessity for 617 

3400. Sufficiency of consideration 619 

3401. Valuable consideration 620 

3402. Accommodation paper 621 

3403. Love and affection 622 

3404. Consideration for extension 623 

3405. Validity of consideration 624 

CHAPTER LXXXVI. 

ACCEPTANCE. 

3410. Presentment for acceptance 626 

3411. Acceptance — Necessity for 628 

3412. By whom acceptance made 629 

3413. Manner of acceptance 629 

3414. When acceptance implied 630 

3415. Acceptance of incomplete bill 631 

3416. Qualified or conditional acceptance 632 

3417. Acceptance for honor 632 

3418. Effect of acceptance 633 

CHAPTER LXXXVn. 

NEGOTIATION AND TRANSFER. 

3425. Parties to transfer 635 

3426. Time of transfer 636 

3427. Transfer by indorsement 637 

3428. Striking out indorsement 638 

3429. Transfer by blank indorsement 639 

3430. Transfer by special indorsement 640 

3431. Transfer by restrictive Indorsement 640 

3432. Transfer by delivery 642 

3433. Transfer by assignment 642 

3434. Effect of transfer upon equities 643 



XVm TABLE OF CONTENTS. 

SECTION. PAGE. 

3435. Liability of transferrer by indorsement 644 

3436. Liability of transferrer by delivery 646 

3437. Liability of transferrer by assignment 646 

3438. Transferrer's implied warranties 647 

CHAPTER LXXXVIII. 

MATURITY, GRACE, EXTENSION AND RENEWAL. 

3445. Maturity of paper payable at a fixed time 648 

3446. Maturity of paper payable on or before or after a fixed time. . . . 649 

3447. Maturity of paper payable on or after demand 650 

3448. Days of grace 651 

3449. Effect of extension or renewal as between parties 652 

3450. Effect of extension or renewal as discharge of other parties 653 

3451. What constitutes an extension or renewal 655 

3452. Effect of laches 656 

CHAPTER LXXXIX. 

PRESENTMENT, PROTEST, PAYMENT AND DISCHARGE 

3460. Meaning of bona fide holder 658 

3461. What is usual course of business 659 

3462. Holder without notice 660 

3463. Necessity for presentment for payment and demand 662 

3464. Time for presentment or demand 663 

3465. Place of presentment or demand 664 

3466. Manner of presentment or demand 665 

3467. To whom presentment should be made 666 

3468. By whom presentment may be made 667 

3469. Waiver of presentment and demand 668 

3470. Excuses for delay in presentment and demand 668 

3471. Discharge by payment 669 

3472. Payment for honor 671 

3473. Discharge by cancelation and surrender 672 

3474. Discharge by accord and satisfaction 673 

3475. Discharge by alteration 673 

3476. Discharge of persons secondarily liable 675 

3477. Dishonor and protest 675 

3478. Notice of dishonor 676 

3479. By whom and when notice of dishonor given 677 

3480. To whom notice of dishonor given 678 

3481. Time of giving notice of dishonor 679 

3482. When notice of dishonor unnecessary 680 

3483. Waiver of notice of dishonor 681 



TABLE OF CONTENTS. xix 

TITLE FIVE 

BONDS 



CHAPTER XC. 

BONDS IN GENERAL. 
SECTION. PAGE. 

3490. Bonds— Definition 683 

3491. General nature and essentials of bonds 684 

3492. Parties to a bond 685 

3493. Form and contents in general 686 

3494. Designation of parties 686 

3495. Execution in general 687 

3496. Effect of partial execution 688 

3497. Filling blanks 689 

3498. Acknowledging, attesting and recording 690 

3499. Delivery and acceptance 691 

3500. Consideration 692 

3501. Duress, fraud and mistake 693 

■3502. Statutory bonds and their validity 693 

3503. Common-law bonds and their validity 694 

3504. Construction — General rules 695 

3505. Construction with respect to parties 696 

3506. Construction with respect to liability 697 

3507. Construction with respect to performance 698 

3508. Construction with respect to cancelation and rescission 699 

3509. Negotiability of bonds 700 

3510. Mode of transfer of bonds 701 

3511. Interest or title passing by transfer 702 

3512. Payment or release after assignment 703 

3513. Rights of assignee or transferee 704 

3514. Bona fide purchasers in general 705 

3515. Obligation to perform condition 707 

3516. Performance by payment 708 

3517. Breach of condition 709 

CHAPTER XCI. 

BONDS IN LEGAL PROCEEDINGS. 

3525. Bonds given in legal proceedings — Attachment bonds 711 

3526. Bonds given in legal proceedings — Attachment bonds — Amount... 712 

3527. Bonds given in legal proceedings— Attachment bonds— Approval. . 713 

3528. Bonds given in legal proceedings — Attachment — Forthcoming bonds 714 

3529. Bonds given in legal proceedings— Executions— Forthcoming bonds 715 



XX TABLE OF CONTENTS. 

SECTION. PAGE. 

3530. Bonds given in legal proceedings — Appeal bonds 716 

3531. Bonds given in legal proceedings — Appeal bonds — Amount 717 

3532. Bonds given in legal proceedings — Bail bonds in civil actions 718 

3533. Bonds given in legal proceedings — Bail bonds in criminal actions. 720 

3534. Bonds given in legal proceedings — Injunction bonds 721 

3535. Bonds given in legal proceedings — Administration bonds 723 

3536. Bonds given in legal proceedings — Administration bonds 725 

3537. Bonds given in legal proceedings — Guardians'bonds 726 

CHAPTER XCII. 

PRIVATE INDEMNITY BONDS. 

3540. Private indemnity bonds — In general 728 

3541. Private indemnity bonds — Agents' bonds 730 

3542. Private indemnity bonds — Contractors' bonds 731 

3543. Private indemnity bonds — Contractors' bonds for city and other 

work 732 

3544. Private indemnity bonds — Contractors' bonds for county and mu- 

nicipal work 735 

3545. Private indemnity bonds — Contractors' bonds — Third parties .... 736 

3546. Private indemnity bonds — Extent of contractors' bonds 737 

3547. Private indemnity bonds — Contractors' bonds — Right of surety. . 738 

3548. Private indemnity bonds — Contractors' bonds — Against liens.... 739' 

3549. Private indemnity bonds — Contractors' bonds — Against liens — Ex- 

tent of liability 741 

3550. Private indemnity bonds — Liquor dealers' bonds 742 

3551. Private indemnity bonds — Employes' bonds 743 

3552. Private indemnity bonds — Employes' bonds — Duty of employer... 745 

3553. Private indemnity bonds — Auctioneers' bonds 746 

3554. Private indemnity bonds — Abstracters' bonds 747 

3555. Private indemnity bonds — Bank officers' bonds 749 

CHAPTER XCin. 

MUNICIPAL BONDS. 

3560. Municipal bonds — General nature 751 

3561. Municipal bonds — Power to issue 752 

3562. Municipal bonds — Form and mode of execution 753 

3563. Municipal bonds — Prescribed mode must be followed in execution 

of power 754 

3564. Municipal bonds — Execution — Signature 755 

3565. Municipal bonds — Execution — Seal 756 

3566. Municipal bonds — Execution — Date 757 

3567. Municipal bonds — Execution — To whom made payable 758 

3568. Municipal bonds — ^Execution — Place of payment 759 

3569. Municipal bonds — Execution — Time of payment 760 



TABLE OF CONTENTS. Xxi 
SECTION. PAGE. 

3570. Municipa. bonds— Execution— Denomination and amount payable 761 

3571. Municipal bonds — Delivery 762 

3572. Municipal bonds — Ratification 762 

3573. Municipal bonds — Negotiability 763 

3574. Municipal bonds — Transfer and sale 764 

CHAPTER XCIV 

CORPORATE BONDS. 

3580. Corporate bonds — General nature 766 

3581. Corporate bonds — Formalities in preparation and issue 767 

3582. Corporate bonds — Formalities in execution — Seal 769 

3583. Corporate bonds — Method of drafting 769 

3584. Corporate bonds — Kinds and classes 771 

3585. Corporate bonds — Negotiability 772 

3586. Corporate bonds — Purchasers and bona fide holders 773 

3587. Corporate bonds — Coupons 775 

3588. Corporate bonds — Payment 766 

CHAPTER XCV. 

OFFICIAL BONDS. 

3595. Official bonds— In general 778 

3596. Official bonds — Delivery, approval, and filing 779 

3597. Official bonds — Effect of irregularities in execution of bond 780 

3598. Official bonds — Alterations and forgeries 782 

3599. Official bonds — Eligibility and title of principal to office 783 

3600. Official bonds — Liability of sureties limited to the term 784 

3601. Official bonds — Liability continued after the term 785 

3602. Official bonds — Liability of sureties for acts outside official duty. . 786 

3603. Official bonds — Liability of sureties on bond of officer for illegal 

arrest 787 



TITLE SIX 



BUILDING, CONSTRUCTION, AND WORKING 
CONTRACTS 



CHAPTER XCVI. 

ARCHITECTS, ENGINEERS, AND SUPERINTENDENTS. 

3610. Architects in general 788 

3611. Contracts with architects 789 



XXll TABLE OF CONTENTS. 

SECTION. PAGE. 

3612. The plans and drawings 792 

3613. Right on death of architect 794 

3614. The architect as agent of the employer 794 

3615. Power of architect 796 

3616. Liabilities of architect to builders 799 

CHAPTER XCVII. 

SPECIFICATIONS, BILLS OF QUANTITIES, AND TENDERS. 

3620. Specifications 800 

3621. Bill of quantities 803 

3622. Tenders 805 

CHAPTER XCVHI. 

CREATION OF BUILDING, CONSTRUCTION, AND WORKING 
CONTRACTS. 

3630. Definitions of building, construction, or working contracts 808 

3631. Verbal and informal contracts 808 

3632. Written contracts 810 

3633. Mutuality of contract 813 

3634. Contracts with corporations 814 

3635. Liability of infants 815 

3636. Request for bids and acceptance of bids 816 

3637. Certainty of the contract 816 

3638. Parties to the contract 817 

3639. Delivery and recording of the contract 818 

3640. Acceptance by implication 819 

3641. Provisions for certificates of approval — General statement 819 

3642. Architects' and superintendents' certificates 820 

3643. Part-performance certificate 821 

3644. Form of certificate 821 

3645. Performance to satisfaction of owner 822 

3646. Provisions for payment for labor and materials 823 

3647. Provision for arbitration 824 

CHAPTER XCIX. 

ARBITRATION. 

3655. Agreement to submit to arbitration 825 

3656. Architect as arbitrator 826 

3657. Refusal to submit to arbitration 828 

3658. Architect's responsibility as arbitrator 828 

3659. Distinction between award by arbitration and certificate stipulated 

for in the contract 829 



TABLE OF CONTENTS. Xxiii 

CHAPTER C. 

CONSTRUCTION OF BUILDING AND WORKING CONTRACTS. 
SECTION. PAGE. 

3665. General rules of construction 830 

3666. Construction of particular words and phrases 833 

3667. Entire and divisible contracts 834 

3668. Joint and several contracts 836 

3669. Dependent and independent stipulations 836 

CHAPTER CI. 
MODIFICATIONS AND ALTERATIONS. 

3675. Right to alter or modify the plans and specifications 837 

3676. Effect on original contract of deviations and modifications 841 

3677. Compensation — Allowance and deductions from 842 

CHAPTER Cn. 

RIGHT TO RESCIND AND TERMINATE CONTRACT. 

3680. Right to rescind in general 844 

3681. Right on failure to perform 846 

3682. Contract provision for termination or rescission 848 

3683. Waiver of right to rescind or annul the contract 849 

3684. Forfeiture on rescission of the contract 850 

CHAPTER cm. 

PERFORMANCE OR BREACH OF THE CONTRACT. 

3690. General statement 851 

3691. Contracts to sink wells 856 

3692. Entire and severable contracts 857 

3693. Substantial performance of the contract — Generally 859 

3694. Substantial performance — Recoupment and deductions 862 

3695. Substantial performance — Question of fact — General rule and tests 864 

3696. Substantial performance — Illustrative cases 865 

3697. Deviations and departures from sample or original contract 867 

3698. Part performance and recovery on the quantum meruit 870 

3699. Part performance— iCompletion prevented by owner — Quantum 

meruit 873 

3700. Part performance— Illustrative cases 877 

3701. Part performance— Fault of contractor 877 

3702. Performance prevented by destruction of the premises 880 

3703. Performance becoming impossible 885 

3704. Illegal contracts 887 

3705. Consequence of defective work 887 



XXIV TABLE OF CONTENTS. 

SECTION. PAGE. 

3706. Acceptance and waiver of defective performance 892 

3707. Performance to satisfaction of architect or engineer 895 

3708. Performance to satisfaction of arcliitect — Illustrative cases 900 

3709. Performance to satisfaction of architect — Necessity, binding 

effect, and waiver of certificate 902 

3710. Performance to satisfaction of owner 906 

3711. Merger 909 

3712. Time of performance in general 909 

3713. Time of performance — Reasonable time 912 

3714. Extension of time for performance 917 

3715. Waiver of time limit 920 

3716. Time words 922 

3717. Time penalties 922 

3718. Waiver by extension of time 923 

3719. Effect of extras and alterations as to time 925 

3720. Other excuses for delays 926 

3721. Abandonment of work by contractor 927 

3722. Completion of structure or work by owner 928 

CHAPTER CIV. 

PAYMENT AND PROVISIONS RELATING THERETO. 

3730. Certificate a condition precedent 933 

3731. When final certificate not required 939 

3732. Waiver of architect's certificate 941 

3733. When payment must be made 942 

3734. Liability for compensation 946 

3735. Payments — How made 949 

3736. Enforcement of payment 950 

CHAPTER CV. 

LIABILITY FOR EXTRAS. 

3740. General statement 953 

3741. What constitutes extras 954 

3742. Special stipulations as to extras 956 

3743. Price of building named in contract — Effect of tenders 960 

3744. Extras independent of the contract 961 

3745. Extras impliedly authorized 963 

3746. Valuing extra work 964 

3747. Extras ordered not a waiver of original contract 964 

3748. Authority of architect or engineer to order extras 965 

3749. Liability for extras 966 

3750. Right of contractor to perform extra work 970 

3751. Compensation for extra work 970 



TABLE OF CONTENTS. XXV 

CHAPTER CVI. 

SPECIFIC PERFORMANCE OF THE CONTRACT. 
SECTION. PAGE. 

3755. General considerations 972 

3756. The earlier practice 972 

3757. Specific performance sometimes granted 974 

3758. Building contracts not usually enforced 976 

CHAPTER CVn. 

LIQUIDATED DAMAGES, PENALTIES AND FORFEITURES. 

3765. Penalties generally 980 

3766. Liquidated damages generally 980 

3767. Distinction 982 

3768. Forfeitures generally 983 

3769. Instances and effect of penalties 984 

3770. Instances of liquidated damages 985 

3771. Instances and effect of forfeitures 98S 

3772. Enforcement on breach of contract 987 

Zm. Notice 987 

3774. Measure of damages 988 

CHAPTER CVni. 

DEATH OR INSOLVENCY OF ONE PARTY. 

3780. Effect of death of one of the parties to a building contract 991 

3781. Effect of insolvency or bankruptcy of party 993 

CHAPTER CIX. 

RIGHT OF PROPERTY IN BUILDING MATERIAL 

3785. General statement 995 

3786. Agent or independent contractor 995 

3787. Passing of title 996 

3788. Express clauses 1000 

3789. Buildings erected upon land of another without his authority. . 1001 

3790. Old materials belong to contractor 1001 

CHAPTER ex. 

BONDS AND LIABILITY THEREON. 

3795. General statement 1002 

3796. Statutes relating to contractors' bonds 1003 

3797. Failure to comply with statutes 1004 



XXVI TABLE OF CONTENTS. 

SECTION. PAGE. 

3798. Rights and liabilities of sureties 1004 

3799. Conditions in bond affording right of action 100& 

3800. Effect of illegality of the contract 1009 

3801. Effect of conduct of obligee 1009 

3802. Privity between beneficiaries and obligee 1010 

3803. Bonds executed to wrong obligees 1011 

3804. Action on bond 1011 



TITLE SEVEN 

DEEDS AND CONVEYANCING 



CHAPTER CXI. 

CAPACITY OF PERSONS TO HOLD AND CONVEY LAND. 

3810. Disability of infants — Deeds voidable, not void 1014 

3811. Disability of infants — No estoppel by declaration of age 1016 

3812. Disability of infants — INIarried women under age 1017 

3813. Disability of infants — Who may affirm or disaffirm minority 1018 

3814. Disability of infants — What amounts to an affirmance 1019 

3815. Disability of infants — What amounts to a disaffirmance 1021 

3816. Disability of infants — Affirmance from lapse of time 1021 

3817. Disability of infants — Restoration of purchase-money 1022 

3818. Disability of married women — In general 1023 

3819. Disability of married women — Conveyances between husband and 

wife 1025 

3820. Disability of insane persons — Presumption and proof regarding 

insanity 1026 

3821. Disability of insane persons — Deed of insane persons under 

guardianship 1027 

3822. Disability of insane persons — Confirmation and disaffirmance of 

deed 1028 

3823. Disability of insane persons — Restoring consideration on disaffirm- 

ance 1029 

3824. Disability from drunkenness 1030 

3825. Disability from duress — In general ' 1031 

3826. Disability from duress — Duress renders deed voidable only 1032 

3827. Disability from undue influence— What constitutes undue influence 1033 

3828. Disability from undue influence — Confidential relation of parties. . 1035 

3829. Disability from undue influence — Relation of parent and child.... 1036 

3830. Disability from adverse possession — At common law and under 

statutes 1037 

3831. Disability from adverse possession — What constitutes adverse pos- 

session 1038 



TABLE OF CONTENTS. XXvii 

SECTION. PAGE. 

3832. Capacity of corporations as vendors 1039 

3833. Capacity of corporations as purchasers 1040 

3834. Capacity of aliens to purchase and convey real estate 1041 

3835. Capacity of convicts to take and convey real property 1043 

CHAPTER CXII. 

ESTATES IN FEE AND THEIR TRANSFER BY DEED. 

3840. Deeds of conveyance — Definitions — Form 1046 

3841. Distinguished from other instruments 1047 

3842. Various species classified and distinguished 1048 

3843. Designation of parties — The grantor 1051 

3844. Designation of parties — The grantee 1053 

3845. Partnerships as parties 1055 

3846. Corporations as parties 1056 

3847. Recitals, their use and effect 1057 

3848. Consideration — Necessity for 1059 

3849. Consideration — What is a valuable consideration 1060 

3850. Consideration — Marriage a valuable consideration 1062 

3851. Consideration — Antecedent debt as a valuable consideration 1063 

3852. Consideration — Voluntary conveyances 1064 

3853. Consideration — Recital of payment of 1065 

, 3854. Operative words ' 1066 

3855. Description and boundaries — General considerations 1067 

3856. Description — Certainty required 1068 

3857. Description — Fatal uncertainty 1069 

3858. Description — Monuments, their controlHng effect over courses and 

distances 107O 

3859. Description — Streets and highways as boundaries 1071 

3860. Description — Tide waters on boundaries 1072 

3861. Description — Rivers and streams as boundaries 1074 

3862. Description — Lakes and ponds as boundaries 1075 

3863. Description — Reference to maps and surveys 1076 

3864. Exceptions and reservations — ^Terms distinguished 1077 

3865. Exceptions and reservations — Particular cases 1079 

3866. Exceptions and reservations— Whether personal or appurtenant to 

the land 1081 

3867. The habendum— Office and effect 1083 

3868. The habendum— Naming of grantee 1084 

3869. The habendum— Use of word "heirs" in limiting estates in fee 1085 

3870. The habendum— The rule in Shelley's case 1086 

3871. The habendum— Estates tail 1088 

3872. Conditions precedent and subsequent— How created 1089 

3873. Conditions precedent and subsequent— Determinable or qualified 

fee 1089 

3874. Conditions precedent and subsequent— Conditions subsequent not 

favored in law 1""1 



XXVlll TABLE OF CONTENTS. 

SECTION. PAGE. 

3875. Conditions — Not implied from the purposes of the grant 1092 

3876. Conditions precedent and subsequent — Void conditions 1094 

3877. Restrictions as to use of land in general 1095 

3878. Restrictions as to use of land — Particular restrictions 1096 

3879. Restrictions — Who have the burden and benefit of restrictions 1096 

3880. Restrictions as to use of land — When restrictive covenants run 

with the land 1098 

3881. Restrictions — Waiver and release of 1100 

3882. Covenants for title — In general 1101 

3883. Covenants for title — Imphed covenants 1102 

3884. Covenants for title — Covenants for seizin and right to convey 1103 

3885. Covenants of title — Covenants against encumbrances 1104 

3886. Covenants for title — Covenants for warranty and quiet enjoyment. 1106 

3887. Covenants for title — Covenants that run with the land 1107 

CHAPTER CXIII. 

THE DEED ITS EXECUTION AND DELIVERY. 

3890. Execution of deed — Signing in general 1109 

3891. Execution of deed — Signing by mark 1110 

3892. Execution of deed — Signing by hand of another 1111 

3893. Execution of deed — Execution under power of attorney 1112 

3894. Execution of deed — By married woman by power of attorney 1114 

3895. Execution of deed — Execution by corporations 1114 

3896. Sealing — Use and necessity of seals 1115 

3897. Sealing — Scrolls and other devices used as seals 1116 

3898. Sealing — Seals of corporations 1118 

3899. Attestation — At common law and by statute 1118 

3900. Attestation — Requisites of a good attestation 1119 

3901. Acknowledgment^The purpose and effect of acknowledgment.... 1120 

3902. Acknowledgment — Who may make an acknowledgment 1121 

3903. Acknowledgment — Who may take an acknowledgment 1123 

3904. Acknowledgment — Jurisdiction of officer 1125 

3905. Acknowledgment — Manner of taking and certifying 1128 

3906. Acknowledgment — Authentication of official character 1128 

3907. Acknowledgment — Errors and omissions in certificates 1129 

3908. Acknowledgment— Identity of party 1130 

3909. Acknowledgment — By married woman 1131 

3910. Delivery — A matter of intention 1133 

3911. Delivery — Gives immediate effect to a deed 1134 

3912. Delivery — To whom it may be made 1136 

3913. Delivery — Presumption of from possession 1138 

3914. Delivery — Destruction, cancelation, or surrender of deed 1139 

3915. Delivery — When complete 1140 

3916. Delivery — Acceptance of the grantee essential 1141 

3917. Delivery — Presumption of from recording 1143 

3918. Delivery in escrow — What constitutes a delivery in escrow 1144 

3919. Delivery in escrow — When title passes under delivery in escrow. .. 1145 



ELLIOTT ON CONTRACTS 



TITLE ONE 

AGENCY 



CHAPTER LIX. 



GENERAL PRINCIPLES EXECUTION OF CONTRACT BY AGENT. 



12830 
2831. 
2832. 

2833. 
2834. 

2835. 



2836. 



2837. 



2838. 
2839. 



2840. 



Introductory. 

Definition. 

Constituent or essential ele- 
ments. 

General and special agents. 

Authority — How executed by 
agent — Generally. 

Mere descriptive words in- 
suificient to bind principal 
and exonerate agent. 

Exception to doctrine of de- 
scriptio personarum in case 
of bank officers and pub- 
lic agents. 

Construction of simple con- 
tracts — Intention of par- 
ties. 

Negotiable instruments. 

Extrinsic evidence to explain 
negotiable instruments — 
Conflicting decisions. 

Construction taking into con- 
sideration body of instru- 
ment and signature alone 
— Illustrative cases. 



§ 2841. Construction considering re- 
citals, together with signa- 
tures, headings, marginal 
notes or seals. 

2842. Ambiguity in instruments — 

Parol evidence held admis- 
sible. 

2843. Cases in which parol evidence 

was excluded. 

2844. Principal held liable in equity. 

2845. Difference in rule as to ne- 

gotiable instruments when 
question is between original 
parties from that when in 
hands of innocent third 
party. 

2846. Summary of the most ap- 

proved doctrine as to nego- 
tiable instruments. 

2847. Sealed instruments — Execu- 

tion by agent. 

2848. Consequences of defective 

execution. 

2849. Undisclosed principal — Parol 

evidence to hold liable. 



§ 2830. Introductory. — As stated in a preceding volume of 
this work,^ agency may be viewed as a mode of forming the con- 
tractual relation, or it may be considered as a special form or kind 
of contractual and legal relation in the general nature, at least, 
of a contract of employment.^ So far as it is regarded merely in 

^Vol. 1, ch. XV, §§ 450, 451. 'But a servant or employe may 

I 
1 — Contracts, Vol. 4 



§ 2831 AGENCY. 2 

the former light the principal questions relate to the capacity of 
the parties and the nature and manner of forming the contract 
or relation. These have already been considered, and so have the 
general rules as to the authority of agents and as to the rights 
and liabilities of the parties, both between themselves and with 
reference to third persons f but, viewed as a special form of con- 
tractual and legal relation, something more remains for consider- 
ation, especially regarding particular kinds of agents. 

§ 2831. Definition. — Agency has been defined as, "a legal 
relation, founded upon the express or implied contract of the 
parties, or created by law, by virtue of which one party — the 
agent — is employed and authorized to represent and act for the 
other — ^the principal — in business dealings with third persons.'"'^ 
A contract of employment is usually in some sense a contract of 
agency, but "employment" and "agency" are not strictly synony- 
mous and coextensive, for, as already shown, an employe is not 
always an agent in the full sense. The employment, to constitute 
an agency, must, as a general rule at least, be for the purpose of 
bringing the employer into legal relations with some third party.* 
So, too, the relation of husband and wife does not necessarily cre- 
ate an agency.' Partnership does do so, and agency is often 
regarded as one of the tests of partnership," but, of course, the 
mere relation of principal and agent or the formation of a con- 
not always be an agent in the full Encyc. of Law (2d ed.) 938 and 
sense, and distinctions have been note; Wharton Agency, 1; Words 
drawn between the relation of mas- and Phrases, Tit. "Agency" and 
ter and servant and that of principal "Agent"; State v. Hubbard, 58 Kans. 
and agent. Kingan Co. v. Silver, 13 797, 51 Pac. 290, 39 L. R. A. 860; 
Ind. App. 80, Zy N. E. 413; Singer Sternaman v. Metropolitan Life Ins. 
Mfg. Co. V. Rahn, 132 U. S. 518, 3i Co., 170 N. Y. 13, 62 N. E. 763, 57 
L. ed. 440, 10 Sup. Ct. 175. To same L. R. A. 318, 88 Am. St. 625. 
effect, Cooley on Torts, 531; Mechem * Anson Law of Contracts, 332> 
Agency, §§ 1, 2. See also, 1 An- 333 ; Central Georgia Land &c. Co. 
drews' Am. Law, 824; Sternaman v. v. Exchange Bank, 101 Ga. 345, 28 
Metropolitan L. Ins. Co., 170 N. Y. S. E. 863. 

13, 62 N. E. 763, 57 L. R. A. 318, 88 "Anson Contracts (2d Am. ed.). 
Am. St. 625 ; Hand v. Cole, 88 Tenn. p. 441. 

400, 12 S. W. 922, 7 L. R. A. 96. ° See cases cited in note to Cudahy 

' Vol. 1, ch. XV. Packing Co. v. Hibon, 92 Miss. 234, 

=a Mechem Agency, § 1. For other 46 So. 73, 18 L. R. A. (N .S.) 1072, 
definitions, most of which are sim- et seq. 
ilar in substance, see 1 Am. & Eng. 



3 GENERAL PRINCIPLES. ' § 2832 

tract of agency does not necessarily, nor ordinarily, create a part- 
nership.' 

§ 2832. Constituent or essential elements. — The constitu- 
ent elements of an agency, generally essential thereto, may be 
briefly summarized as follows: i. There must be a competent 
principal. 2. There must be a competent agent.^ 3. There 
must be a delegation of authority from the principal to the agent, 
either by contract, express or implied, or authority must be shown 
to exist by operation of law from the peculiar relation of the par- 
ties and the circumstances of the transaction, or by estoppel or 
ratification. 4. The purpose for which this authority is dele- 
gated must be a lawful one. 

§ 2833. General and special agents. — A general agent has 
been defined or described as one authorized to conduct or transact 
all of his principal's business or all his business of some particular 
kind ;® but it must be understood that one may be a general agent 
as to a particular business, and he is to be regarded as a general 
agent if he is authorized to do all acts connected with- such busi- 
ness or employment.^" A special agent is one authorized to do 
one or more special things to accomplish a particular object and 
not to act generally as representing the principal, even in a par- 
ticular business, without restraint or limitation." In other words, 

'Cudahy Packing Co. v. Hibon, 92 288, 297; Bill v. Offutt, 10 Bush 

Miss. 234, 46 So. 12>, 18 L. R. A. (N. (Ky.) 1632; Anderson v. Coonley, 

S.) 975, and numerous cases cited in 21 Wend. (N. Y.) 279. See also,, 

note on pages 1032, et seq. See also, Union Stockyards &c. Co. v. Mal- 

Shrum V. Simpson, 155 Ind. 160, 57 lory &c. Co., 157 111. 554, 41 N. E. 

N. E. 708, 49 L. R. A. 792. Meehan 888, 48 Am. St. 341 (general agent 

V. Valentine, 145 U. S. 611, 36 L. ed. held to be one authorized to do all 

835, 12 Sup. Ct. 972. acts connected with a particular busi- 

°As to competency or capacity to ness, or at a particular place), 

appoint and act as agent, see vol. " See Loudon Sav. Fund Soc. v. 

I, ch. XV, § 451. Hagerstown Sav. Bank, 36 Pa. St. 

°1 Parsons Cont., § 41; Gibson v. 498, 78 Am. Dec. 390, for definitions 

Snovir Hardw. Co., 94 Ala. 346, 10 and distinction between general and 

So. 304; Cleveland &c. R. Co. v. special agent. Also, Wood v. Mc- 

Moore, 170 Ind. 328, 82 N. E. 52, Cain, 7 Ala. 800, 42 Am. Dec. 612; 

84 N. E. 540 (all business at par- Toledo, Wabash & Western R. Co. 

ticular place). v. Owen, 43 Ind. 405. For defini- 

" Vol. 1, ch, XV, I 453 ; Wheeler tions and descriptions of special 

v. McGuire, 86 Ala. 398, 5 So. 190, 2 agents, see further, the note to 

L. R. A. 808, and note ; Crain v. Wheeler v. McGuire, 2 L. R. A. 808 ; 

First Nat. Bank, 114 III. 516, 2 vol. 1, ch, xv, § 453 ; Martin v. Farns- 

N. E. 486; Cruzan v. Smith, 41 Ind. worth, 49 N. Y. 555. 



§ 2834 AGENCY. 4 

a Special agency is confined to a particular act or transaction and 
is usually qualified or limited, either by express instructions or by 
restrictions implied from the act to be done. 

§ 2834. Authority — How executed by agent — Generally. — 

Where an agent has authority to execute a simple parol contract 
for his principal so as to bind the principal, the question as to 
whether he has done so in such a manner as to bind the principal, 
or whether he has bound himself, is often a difficult one, because 
of conflict in the evidence or ambiguity and uncertainty in the 
contract, or the circumstances of the particular case, rather than 
because of any doubt as to the principles of law. In such cases 
the safe course for the agent to pursue is to disclose the relation 
between himself and his principal and make it clear that the con- 
tract is on behalf of the principal and not on his own. In case 
of written contracts, however, there is often more difficulty in 
construing them and in determining and applying the law. It 
is proposed, therefore, to consider that branch of the subject 
somewhat specifically, and to give numerous illustrations. Such 
written contracts are usually : ( i ) Evidences of debt, or other con- 
tracts not negotiable and not under seal; (2) Bills of exchange 
and other negotiable instruments; (3) Specialties, or instruments 
under seal. The manner in which all of such instruments should 
be executed in special cases is treated, to some extent at least, 
in connection with other particular topics, and this is especially 
true in regard to negotiable instruments ; but, without giving the 
same examples here, it is the purpose to give a sufficient number 
of illustrations of contracts of each kind, in this connection, to 
show and enable one to determine when the principal is bound 
and when the agent has bound himself. As a general rule an 
agent who signs a contract intending to bind his principal and not 
himself should express in the contract the capacity in which he 
acts, and unless this is done in the body of the contract, or the 
signature or surrounding circumstances and conditions are such 
as to disclose the principal as the person intended to be bound, 
the agent will ordinarily be liable himself.^^ It is, of course, 

"See Serrell v. Derbyshire & R. Stackpole v. Arnold, 11 Mass. 27, 6 
Co., 9 C. B. 811, 19 L. J. C. P. 371; Am. Dec. ISO; Savage v. Rix, 9 N. 
Mayhew v. Prince, 11 Mass. 54; H. 263; Pentz v. Stanton, 10 Wend. 



5 GENERAL PRINCIPLES. § 2835 

safest to clearly show, both in the body of the instrument and by 
the signature, that the contract is that of the principal by the 
agent ; but it is usually sufficient to show this clearly in the signa- 
ture, as "A. B. by C. D., agent.' 



"13 



§ 2835, Mere descriptive words insufficient to bind princi- 
pal and exonerate agent. — Such words as "agent," "trustee," 
"treasurer," "president," and the like, added to the signature of 
the agent, are generally regarded as merely descriptive of the per- 
son of the signer, and will not exonerate the agent from personal 
liability unless the agency is otherwise revealed or shown.^* The 
general doctrine is that such words constitute merely "descriptio 
personae," or "descriptio personarum." Thus, a note running, 
"I promise to pay," and signed, "A. B., agent," or "A. B., agent 
of C. D.," purports to be the note of A. B., and not that of C. D. ; 
for the word "agent," or the words "agent of C. D.," are merely 
descriptive of the person of A. B., and do not absolutely indicate 
that he signed the instrument for and on behalf of C. D., or as his 
representative.^'"* To make such a promise, on its face, binding 
upon the principal, it should purport to be made by the principal, 
as "C. D., by A. B., agent;" although the word "agent," and in- 
deed the name of the agent also, may be altogether omitted after 

(N Y.) 271, 25 Am. Dec. 558; Larmatt v. Rocky Mountain &c. 

Sharpe v. Bellis, 61 Pa. St. 69, 100 Bank, 1 Colo. 278, 9 Am. Rep. 156 

Am. Dec. 618; Tarver v. Garlington, and note; Buclahalter v. Perry, 127 

27 S. Car. 107, 2 S. E. 846, -13 Am. Ga. 438, 56 S. E. 631, 119 Am. St. 

St. 628: note in 21 L. R. A. (N. S.) 343 and note; Stoble v. Dills, 62 111. 

1045. 432; Prather v. Ross, 17 Ind. 495; 

*It is also sometimes said that Hobbs v. Cowden, 20 Ind. 310; Con- 

a signature in the form of "C. D., gressional Tp. v. Weir, 9 Ind. 224; 

agent for A. B.", or "C. B. for A. Hayes v. Matthews, 63 Ind. 412, 30 

B." is sufficient in this regard. Rein- Am. Rep. 226; Reeve v. First Nat. 

hard Agency, § 207. Story Ag., § Bank, 54 N. J. L. 208, 23 Atl. 853, 

274, 278; 1 Parsons Notes & B. 91 ; 16 L. R. A. 143, 33 Am. St. 675; Day- 

Ofifut V. Ayres, 7 Men. (Ky.) 356; ton v. Warne, 46 N. J. L. 659; Met- 

Bank of Genessee v. Patchin Bank, calf v. Wilhams, 104 U. S. 93, 26 L. 

19 N Y 312 But as will be here- ed. 665, and elaborate note m 21 L. 

after' shown, this is not so safe. R. A. (N. S.) 1051-1057, where many 

See Tannett v. Rocky Mountain Nat. other authorities are cited. 
Bank 1 Colo. 278, 9 Am. Rep. 156; "Kenyon v. Williams, 19 Ind. 44; 

Webb V Burke, 5 B. Mon. (Ky.) Hobbs v. Cowden, 20 Ind. 310; Hays 

51- Ballou V Talbot, 16 Mass. 461, v. Crutcher, 54 Ind. 260; Haverhill 

8 Am Dec 146 Mut. Fire Ins. Co. v. Newhall, 1 

"Rew v'Pettet, 1 Ad. & El. 196; Allen (Mass.) 130; Tucker Mfg. Co. 

Hobson V. Hassett, 76 Cal. 203, 18 v. Fairbanks, 98 Mass. 101. 
Pac. 320, 9 Am. St. 193 and note; 



§ 2836 



AGENCY. 



the name of the principal." The agent's name need not stand 
in a particular position, if it is clear and can be legally determined 
from the instrument that the contract is that of the principal, and 
it seems that a note will bind the principal, and not the agent, if 
signed, "A. B., agent for C. D.," or simply, "A. B. for C. D. ;" 
or "For C. D., A. B.," with or without the addition of the word 
"agent."" 

§ 2836. Exception to doctrine of descriptio personarum 
in case of bank officers and public agents. — It is the ordinary 
practice of banks, in drawing negotiable paper at least, to sign 
the name of some officer such as the president or cashier rather 
than the corporate name of the bank, and for this reason and be- 
cause such ofificers are usually entrusted with such matters and 
held out as general agents of the bank in that regard, such instru- 
ments, signed by authorized officers of the class indicated, with 
added words indicating the agency, such as "president" or "cash- 
ier," are presumed to be the act of the bank and usually bind it 
rather than the officer or agent personally.^* The added word or 
words, in such cases, constitute a valid substitute for the name 
of the principal rather than a mere descriptive appellation.^" A 
similar exception or relaxation of the general rule is also often 
made in the case of public agents.^" 

§ 2837. Construction of simple contracts — Intention of 

parties. — As in most cases where the construction of a con- 

"1 Daniel Neg. Instr. 300. 1 Denio (N. Y.) 608; Bank of Gen- 

" Story Ag., § 1S4; Mechera Ag., esee v. Patchin Bank, 19 N. Y 312; 

§ 432. See also, Sheridan v. Car- Houghton v. First Nat. Bank, 26 

penter, 61 Maine 83, and see note 13, Wis. 663, 7 Am. Rep. 107; note in 

§ 2834. 21 L. R. A. (N. S.) 1079. 

"1 Daniel Neg. Instr., § 417; ^"1 Daniel Negot. Instr., § 417. 
Morse Banks & Banking, §§ 158h, ^° It is presumed that they do not 
170; Stamford Bank v. Ferris, 17 intend to bind themselves individual- 
Conn. 259; Collins v. Johnson, 16 Ga. ly in acting in authorized matters 
4S8; Nave v. National Bank, 87 Ind. for the public, and that parties deal- 
204; Erwin Lane Paper Co. v. Farm- ing with them in their public char- 
ers' Nat. Bank, 130 Ind. 367, 30 N. acter rely on the'ir principal rather 
E. 411, 30 Am. St. 246; Hodge v. than that there is any intention to 
Farmers' Bank, 7 Ind. App. 94, 34 N. create an individual liability. Monti- 
E. 123; Pratt v. Topeka Bank, 12 cello v. Kendall, 72 Ind. 91, 37 Am. 
Kans. 570; Folger v. Chase, 18 Pick Rep, 139; Johnson School Tp. v. 
(Mass.) 63; Webster v. Wray, 19 Citizens' Bank, 81 Ind. 515; Mc- 
Nebr. 558, 27 N. W. 644, 56 Am. Ghee v. Larramore, SO Mo. 425; 
Rep. 754; Watervliet Bank v. White, Sanborn v. Neal, 4 Minn. 126, 77 Am. 



7 GENERAL PRINCIPLES. § 2837 

tract is involved, so in determining vi^ho shall be liable on simple 
contracts in writing, not negotiable by the law merchant, the court 
will endeavor to ascertain the intention of the parties ; and, when 
it can be done, such intention will be gathered from the face of the 
instrument itself, by considering it in all its parts, as an entirety." 
When this can be done, parol evidence is not ordinarily admissi- 
ble to explain who is the real contracting party. But a simple 
contract may be ambiguous as to the real parties. When it is so, 
the court will solve the ambiguity, if possible, from the instru- 
ment itself, taking into consideration not only the words and 
figures in the body thereof, and the signatures and additions 
thereto, but any printed or written headings, memoranda in the 
margin, or other indicia which may serve to throw light upon the 
question of intention.^^ But this rule is not to be applied without 
discrimination, and especially in the case of negotiable instru- 
ments, words printed in the margin or heading may not be 
any part of the instrument, and may not always be of much, if 
any, value in determining who is liable.'^ If the ambiguity can- 
not be solved in the manner indicated, and does not arise from 
the meaning to be given to the words employed, but from the 
question as to what claims or persons are embraced within the 
meaning of certain words or phrases, parol evidence may be in- 
troduced to show what the intention of the parties was with 
regard to it.^* And, as a general rule, where there is ambiguity 
as to whether the principal or agent was intended to be bound, 
the courts will admit parol testimony as to such intention, at least 

Dec. 502. See also, Ghant v. Adams, 307; Gillig v. Lake Bigler Road 

2 Ga. 214; Lyon v. Adamson, 7 Iowa Co., 2 Nev. 214. 
509; Knight v. ilark, 48 N. J. L. ^ See First Nat. Bank v. Wallis, 

22, 2 Atl. 780, 57 Am. Rep. 534; ISO N. Y. 455, 44 N. E. 1038; Mer- 

Amison v. Ewing, 2 Coldw. (Tenn.) chants Nat. Bank v. Clark, 64 Hun 

366. (N. Y.) 175, 19 N. Y. S. 136; Casco 

='See vol. 2, §§ 1514, 1621, 1624, Nat. Bank v. Clark, 139 N. Y. 307, 

1655. 34 N. E. 908, 36 Am. St. 70S. Also, 

'= 1 Beach Conts., § 743 ; Scanlan v. Price v. Taylor, 5 Hurlst. & N. 540 ; 

Keith, 102 111. 634, 40 Am. Rep. 624; Bottomley v. Fisher, 1 Hurlst. & C. 

Carpenter v. Farnsworth, 106 Mass. 211; Cooley v. Estebau, 26 La. Ann. 

561, 8 Am. Rep. 360; Hitchcock v. SIS. 

Buchanan, 105 U. S. 416, 26 L. ed. "Barbre v. Goodale, 28 Ore. 465, 

1078. See also, Sayre v. Nichols, 7 38 Pac. €J, 43 Pac. 378; Ginnuth v. 

Cal. 35, 68 Am. Dec. 280; Second Blankenship (Tex. Civ. App.), 28 

Nat. Bank v. Midland Steel Co., 155 S. W. 828. See also ante, vol. 2, 

Ind. 581, 58 N. E. 833, 52 L. R. A. §§ 1659, 1660, 1664. 



§ 2838 AGENCY. 8 

in the case of simple nonnegotiable instruments.^^ A more liberal 
rule obtains in the construction of simple contracts than in that of 
sealed instruments, owing to the fact that contracts under seal 
or specialties, under the common law, are regarded as of such a 
solemn character that only the parties named or described therein 
can sue or be sued upon them.^" In simple contracts, as already 
shown, the principal question is as to the intention of the parties, 
however informally expressed ; and whatever that intention may 
be found to be, the courts will try to ascertain and adopt it, al- 
though a stricter construction may be required, or a stricter rule 
applied, in the case of negotiable instruments.^^ Parol evidence 
will never be received, however, as to any written contract, to 
prove a different intention from that which plainly appears upon a 
fair construction from the face of the instrument itself, except in 
case of fraud or mutual mistake. Hence, if such an instrument, on 
its face, discloses an absolute undertaking by one party, it cannot 
be proved by extrinsic evidence that it was in fact intended to 
bind another.^' 

§ 2838. Negotiable instruments. — In cases of bills of ex- 
change and other instruments negotiable by the law merchant, 
parties whose names do not appear on the face of the instru- 
ment cannot, as a general rule, be introduced into the contract by 
parol, at least as against innocent third persons. The rules of 
the law merchant seem to demand that persons receiving such 
instruments in due course of business must be presumed, under 
ordinary circumstances, to take them on the credit of the parties 

== Bean v. Pioneer Min, Co., 66 Cal. Post v. Pearson, 108 U. S. 418, 27 

451, 6 Pac. 86, 56 Am. Rep. 106; L. ed. 774,23 Sup. Ct. 799; Whitney 

Ogden V. Raymond, 22 Conn. 379, v. Wyman, 101 U. S. 392; Metcalf 

58 Am. Dec. 429; McNeil v. Shober v. Williams, 104 U. S. 93, 26 L. ed. 

&c. Lith. Co., 144 111. 238, 33 N. 665. See 1 Elliott on Ev., § 616.; 

E. 31 ; LaSalle Nat. Bank v. Tolu, note to Keidern v. Winegar, 20 L. 

14 III. App. 141; Swarts v. Cohen, 11 R. A. 705. 

Ind. App. 20, 38 N. E. 536; Shafifer " Briggs v. Partridge, 64 N. Y. 

V. Hohenschild, 2 Kans. App. 516, 357, 21 Am. Rep. 617. 
43 Pac. 979; Haile v. Peirce, 32 Md. "'Merchants' Bank v. Central Bank, 

327, 3 Am. Rep. 139; Hardy v. 1 Ga. 418, 44 Am. Dec. 665. 
Pilcher, 57 Miss. 18, 34 Am. Rep. ''Hypes v. Griffin, 89 111. 134, 31 

432 ; Lerned v. Johns, 9 Allen Am. Rep. 71 ; Williams v. Second 

(Mass.) 419; Getchell v. Foster, 106 Nat. Bank, 83 Ind. 237; American 

Mass. 42; Cutler v. Ashland, 121 Ins. Co. v. Stratton, 59 Iowa 696. 

Mass. 588; Barbre v. Goodale, 28 See also, New York Life Ins Co 

Ore. 465, 43 Pac. 378, 38 Pac. 67; v. Martindale, 75 Kans. 142, 88 Pac. 



9 GENERAL PRINCIPLES. § 2839 

whose names appear thereon as obligors. "It is a general princi- 
ple of commercial law that a negotiable instrument must wear no 
mask, but must reveal its character upon its face. And it extends 
to the liability of parties thereto, who must appear as distinctly 
as the terms of the instrument itself, in order to be bound by 
those terms."^^ 

§ 2839, Extrinsic evidence to explain negotiable instru- 
ments — Conflicting decisions. — There is substantial agree- 
ment among the authorities upon the following propositions : 
I. When a party to a negotiable instrument has by apt words, 
on the face of the instrument, made himself a promisor or 
obligor, he will be bound thereby, and extrinsic evidence can- 
not be admitted to show that in fact such party executed the in- 
strument for another and not for himself. 2. When the words 
of the instrument are sufificiently clear to show that the contract 
was in fact made, as that of the principal, by an agent, for and on 
behalf of his principal, extrinsic evidence is also inadmissible to 
prove that the contract was a personal obligation of the agent and 
not of the principal. "The decisions are not harmonious, how- 
ever, as to whether certain recitals in the body of the instrument 
and certain forms of signature are to be construed as purporting 
to be the contract of the principal or the personal obligation of the 
agent. Moreover, some of the authorities are to the effect that 
the courts will look only to the recitals in the body of the contract 
proper, and to the signature at the foot ; while in others these have 
been construed in connection with other indicia, — such as words 
and phrases contained in the headings or margins, the corporate 
seal, etc., printed, written, or impressed upon the same paper. 
Still other cases find in such recitals, headings and other indicia 
sufficient data to adjudge that ambiguity exists, which is to be 
solved either with or without the introduction of extrinsic evi- 
dence, according to the nature of such ambiguity."'" It is impos- 

KKQ 9^ 1 -R A CN S 1 1045, and Kans. 142, 88 Pac. SS9, 21 L. R. A. 

note on W81 m Am. St 362; (N. S.) 1045, 1081„, 121 Am. St. 362 

Keokuk Falls Imp. Co. v. Kingsland See notes to /eidan v^ Wmegar, 95 

&c. Mfg. Co., 5 Okla. 32, 47 Pac. Mich 430, 54 N. W. 901, 20 L. R. 

4g4 A. 705. 

^1 Daniel Neg. Instr., § 300; New "Reinhard Agency, § 213. 
York Life Ins. Co. v. Martindale, 75 



§ 2840 AGENCY. 



10 



sible to reconcile all the conflicting decisions, and a review of some 
of the most important seems advisable. 

§ 2840. Construction taking into consideration body of in- 
strument and signature alone — Illustrative cases. — In a num- 
ber of cases the question of the liability of a particular party has 
been determined by the construction of the recitals in the body of 
the instrument in connection with the form of the signature, 
without the aid of extrinsic evidence, notwithstanding there was 
more or less ambiguity or doubt in many instances. In an action 
on a promissory note, which read : "We, two of the directors of 
the Ark, etc., Assurance Society, by and on behalf of such society, 
do hereby promise to pay," and which was signed by two persons, 
without any addition indicating an agency, the contract was held 
to be that of the society and not of the persons signing it.^^ Sub- 
stantially the same conclusion was reached in an Iowa case, where 
the action was on a note reading : "We, the undersigned, direct- 
ors," etc., "promise," etc., and signed by three persons without 
any addition to the names.'^ But in an Indiana case where the 
trustees of a Masonic lodge executed their promissory note read- 
ing : "We promise to pay," the note being signed : "A, B, C, 
trustees D lodge," it was held to be the contract of the signers 
individually, and not that of the lodge; and extrinsic evidence 
to show that the note was in fact that of the lodge was held 
improper.^^ In a Massachusetts case, where a note contained a 



^ Aggs V. Nicholson, 1 H. & N. fact, be held to be the intention of the 

165. See also, Haskell v. Cornish, 13 parties. They cannot avoid the con- 

Cal. 45. tract by averring an intention or pur- 

"^ Baker v. Chambles, 4 Greene pose opposed to that which the law at- 

(lowa) 428. taches to their agreement." A some- 

^' Williams v. Second Nat. Bank, what similar ruling was made by the 
83 Ind. 237. In the course of the Court of Appeals of Kentucky in a 
opinion, the court said : "Knowing case in which the plaintiff brought suit 
the law, they [the trustees] must be on a bill reading as follows : "Thos. 
held to have known that the note, B. Posey, Tr., Grand Division of Ken- 
in the form in which it was executed, tucky, pay to the order of A. W. 
purported to be the note of the ap- Elder_ three hundred and twenty dol- 
pellants, and not the note of the lars, in full, of copies of Kentucky 
lodge. What the parties in fact un- New Era, ordered to be sent D. G. 
derstood, supposed, or believed as W. Patricks at January session of 
to the legal eifect or meaning of the G. Division. 'Geo. W. Williams, G. 
form in which they contracted is W. P.' 'Attest: L. Hord, G. S.' The 
immaterial. The intention which the answer alleged that the defendant 
law imputes to their contracts must, (Williams), drew the order sued on, 
in the absence of fraud or mistake of as the presiding officer of the grand 



II 



GENERAL PRINCIPLES. 



2840 



promise in this form : "I, the subscriber, treasurer of the D. T. 
Corporation, promise," etc., signed: "G. L. C, treasurer of the 
corporation," it was decided that this was on its face the note of 
the corporation and not that of the treasurer personally,'* and in 
various jurisdictions, the following forms of notes have been 
held sufficient to bind the principal, and not the agent, when con- 
strued in connection with the signatures : "We, the trustees of 
the X society, promise;" signed, "Trustees of the X society — 
A, B, C, D,"^° and "the pastor and deacons of X church promise 
to pay;" signed, "S. D. Y., for X church,"'" or "the trustees of 
the X church of Y, as such trustees," "promise to pay;" signed, 
"A, B, C, D," "as trustees of the X church of Y."" So, where the 
instrument read : "I, as treasurer of the X Society, or my succes- 
sors in office, promise to pay;" signed, "S. R., treasurer;"'* where 
it read: "We promise to pay;" signed, "A. B., Pres. X Co., C. D., 



division of the Sons of Tempei'ance 
of Kentucky, as grand worthy patri- 
arch, which was signified by the 
letters 'G. W. P.' annexed to his 
signature ; and that it was drawn 
upon the grand treasurer of said 
grand division, and attested by L. 
Hord, the grand scribe, which was 
signified by the letters 'G. S.' an- 
nexed to his signature; and that the 
consideration was as expressed in the 
instrument; that the said grand di- 
vision was a corporation, and that 
the order was drawn in conformity 
to the rules of said grand division, 
and was drawn by the defendant in 
his official character, and not as an 
individual. The lower court over- 
ruled a demurrer to this answer, and 
this ruling was affirmed on appeal, 
where it was said : 'The doctrine is 
well established that, in a case like 
the present, if it can, upon the 
whole instrument, be collected that it 
was intended to bind the principal, 
courts of justice will adopt that con- 
struction of it, however informally it 
may be expressed.' " Taylor v. Will- 
iams, 17 B. Men. (Ky.) 489. See 
also, McClellan v. Robe, 93 Ind. 298 ; 
Coburn v. Omega Lodge, 71 Iowa 
581, 32 N. W. 513; Rendell v. 
Harriman, 75 Maine 497, 46 Am. 
Rep. 421 ; Mellen v. Moore, 68 Maine 



390, 28 Am. Rep. 11; Morell v. Cod- 
ding, 4 Allen (Mass.) 403. 

''Mann v. Chandler, 9 Mass. 335. 
See, to the same effect, McHenry v. 
Duffield, 7 Blackf. (Ind.) 41; Rich- 
mond &c. R. Co. V. Snead, 19 Grat. 
(Va.) 354, 100 Am. Dec. 670. Com- 
pare, also, Liebscher v. Kraus, 74 
Wis. 387, 43 N. W. 166, 5 L. R. A. 
496, 17 Am. St. 171. But see, on 
the other hand, Burlingame v. Brew- 
ster, 79 111. 515, 22 Am. Rep. 177n; 
Wiley V. Shank, 4 Blackf. (Ind.) 
420; McClure v. Bennett, 1 Blackf. 
(Ind.) 189, 12 Am. Dec. 223; Mc- 
Clellan V. Robe, 9^ Ind. 298; Pack 
V. White, 78 Ky. 243 ; Barlow v. Con- 
gregational Soc, 8 Allen (Mass.) 
460 (questioning Mann v. Chandler, 
9 Mass. 335) ; Titus v. Kyle, 10 Ohio 
St. 444; Gregory v. Leigh, Zi Tex. 
813. But compare Sturdivant v. Hull, 
59 Maine 172, 8 Am. Rep. 409. 

^New Market &c. Bank v. Gil- 
let, 100 111. 254, 39 Am. Rep. 39. See 
also. Leach v. Blow, 8 Sm. & M. 
(Miss.) 221. 

^Jefts v. York, 4 Cush. (Mass.) 
371, 50 Am. Dec. 791. 

"Little V. Bailey, 87 III. 239. See 
also, Shoe & Leather Nat. Bank v. 
Dix, 123 Mass. 148, 25 Am. Rep. 49. 

°* Barlow v. Congregational Soc, 
8 Allen (Mass.) 460. 



§ 2840 



AGENCY. 12 



Sec. pro tem;"^" and where it read: "We, or either of us, promise 
to pay in behalf of school district No. 6," etc. ; signed, "A. B., 
president, C. D., secretary, E. F., treasurer."*" So, where the re- 
cital was, "We, as directors," etc., only the corporation was held 
liable, the word "as" excluding the idea of individual liability." 

So, where in the body of the instrument it is shown that the cor- 
poration promises to pay or the like, there is ordinarily little 
doubt that, if authorized, it binds the corporation rather than the 
individual officer or agent.*^ Thus it was so held where the note 
was as follows : "The H. County Agricultural Association, who 
execute this note by her directors, do promise to pay," etc. ; 
signed "T. M. K., A. L. S., secretary, S. F. B. (and ten others), 
directors H. County Agricultural Association. , sure- 
ties."** Where a note read: "We promise to pay;" signed, 
"Warrick Glass Works, J. Price Warrick, Pres.,"** the court said : 
"I do not perceive any significance in the use of the words 'we 
promise to pay,' instead of 'the company promises to pay.' The 
contention was that the use of these words raised an implication 
that it was the joint note of the corporation and of Warrick. 
But, as has been remarked in more than one of the cases cited 
in which the notes contained a promise in like form, the word 'we' 
is often used by a corporate aggregate." The form of the sig- 
nature in this case was considered equally as significant as if it 
had been written "Warrick Glass Works, per J. Price Warrick, 
agent." A similar ruling was made in Wisconsin in a case in 
which the form of the promise was, "We promise to pay;" and 
that of the signature, "X, etc.. Milling Company, F. K., presi- 
dent."*^ 

'^ Farmers' & Mechanics' Sav. *" Armstrong v. Kirkpatrick, 79 

Bank V. Colby, 64 Cal. 352, 28 Pac. Ind. 527. 

118. "Reeve v. First Xat, Bank, 54 

""■Harvey v. Irvine, 11 Iowa 82. N. J. L. 208, 23 Atl. 853, 16 L. R. 

See also, Hei^ner v. Brownell, 70 A. 143, 33 Am. St. 675. 

Iowa 591, 31 N. W. 947, 75 Iowa 341, "Liebscher v. Kraus, 74 Wis. 387, 

39 N, W. 640. 43 N. W. 166, 5 L, R. A. 496, 17 

"Sanborn v. Neal, 4 Minn. 126, Am. St. 171. For further rulings 

137. to the efifect that such a contract is 

" Shaver v. Ocean Min. Co., 21 the obhgation of the principal, a 

Cal. 45; Pearse v. Welborn, 42 Ind. corporation, see Rendell v Harri- 

331; Yowell v. Dodd, 3 Bush (Ky.) man, 75 Maine 497, 46 Am. Rep. 421; 

581, 96 Am. Dec. 256; Whitney v. Carpenter v. Farnsworth, 106 Mass' 

Stow, 111 Mass. 368; Shot well v. 561, 8 Am. Rep. 360. 
M'Kown, 5 N. J. -f 828. 



1 3 GENERAL PRINCIPLES. § 284O 

On the other hand, a note reading, "We promise to pay;" 
signed, "The P. G. Co., by B. F. A., president, C. B. O., vice- 
president, C. H. R., secretary, A. B. T., B. R., J. R. B., di- 
rectors," was held in Indiana to be, prima facie, the joint obliga- 
tion of the makers in their individual capacity, the word "direct- 
ors" being considered as merely descriptio personarum." So, 
where an agreement was entered into for the building of a church 

"by and between the trustees, and building committee of 

Church,— J. M., president, F. L., secretary, J. B., L. X., R. S., 
members, all of the city of D., by authority of the Right Rev. J. 
S. P., bishop of the diocese of D., parties of the first part, and the 
mason, M. L., of the same place, party of the second part," pro- 
viding that "the parties of the first part herewith promise and 
agree for themselves, their heirs, executors and administrators," 
— it was held that the persons designated as "parties of the first 
part" were individually liable.*^ And a note reading as follows : 
"We promise to pay to the order of C. & C. I. Co. $7,500, at M. 
bank, value received;" signed, "E. H. C, Treas., J. C, Prest.," 
the words "R. C. Co." being printed across the face of the note, 
was held, in New York, to be the personal and individual obliga- 
tion of the signers.*^ The court said : "The note does not purport 
to bind the company. If the addition of the official characters of 
the signers had not been added, the words 'R. C. Co.' printed on 
the side of the note would not bind that company. The makers 
expressly promise to pay the note jointly, and if they are not lia- 
ble upon the note, there is no maker who is liable.*' The note must 
show on its face that it was signed for the principal and in some 
way ill his name ; where an agent fails to designate a principal, 
he will be personally liable."^" Other cases in which there was 
held to be an individual liability are cited below.^^ 

*° Taylor v. Reger, 18 Ind. App. "DeWitt v. Walton, 9 N. W. 571, 

466, 48 N. E. 262, 63 Am. St. 352. Seld. Notes 253. 

See also, Albany Furniture Co. v. °°Pentz v. Stanton, 10 Wend. (N. 

Merchants' Nat. Bank, 17 Ind, App. Y.) 271, 25 Am. Dec. 558. See Casco 

531 47 N. E. 227, 60 Am. St. 178. Nat. Bank v. Clark, 139 N. Y. 307, 34 

"Landyskowski v. Lark, 108 Mich. N. E. 908, 36 Am- St. 705. affg. the 

500 66 N W 371 decision from which we have auoted. 

"'Casco'Nat. Bank v. Clark, 64 "Day v. Ramsdell, SO Iowa 731, 

Hun (N. Y.) 634, 46 N. Y. St. 162, 52 N. W. 208, 57 N. W 630, hold- 

18 N. Y. S. 887. iiig that a note reciting, We, the I . 



§ 2841 AGENCY. 14 

§ 2841. Construction considering recitals, together with 
signatures, headings, marginal notes, or seals. — In another 
class of cases, limited in number, the courts have taken into ac- 
count, in construing the contract upon the question whether the 
principal or the agent was bound, the headings, marginal notes, 
corporation seal, and the like, on the paper upon which the con- 
tract was written, and solved the ambiguity, if there could be said 
to be such, without receiving parol evidence. Thus, in New 
Hampshire, it was held that a note signed "A. G., secretary," with 
the official seal of the corporation attached, was a corporate and 
not an individual note.^^ The same view has also been taken in 
Illinois.'^^ And according to the decisions of some courts, the 
corporate seal has the same effect as if the name of the corpora- 
tion had been written under the contract.^* So, headings of such 
instruments have been taken into consideration, and a bill of ex- 
change, headed, "Office of the Belleville Nail Co.," and concluding, 
"Charge same to account of the Belleville Nail Co., A. B., Prest., 
C. D., Sec'y," was held to bind the company, and not the signers.^" 
And a bill dated at the office of a corporation, signed by the pres- 
ident with the addition of the title of his office abbreviated, and 
directing the sum to be charged "to motive power and account," 

P. Co., promise to pay,'' and signed doubt have been executed without 
"J. R., Pres.," and "H. E. R., Sec," attaching to the signatures of the 
is the oMigation of J. R. and H. E. makers the name of the corporation. 
R. individually. See also, the fol- It is still more unusual that persons 
lowing cases : Dulton v. Marsh, L. making an individual note or other 
R. 6 Q. B. 362; Powers v. Briggs, obligation would cause it to be at- 
79 111. 493, 22 Am. Rep. 175; Tama tested by the seal of the corporation 
Water Power Co. v. Ramsdell, 90 with which they were connected." 
Iowa 747, 52 N. W. 209; Ross v. But a contrary ruling was made by 
Brown, 74 Maine 352; Bingham v. the English Queen's Bench. Button 
Stewart, 13 Gil. (Minn.) 96; Mc- v, Marsh, L. R. 6 Q. B. 361, 
Clellan v. Reynolds, 49 Mo. 312 ; "^ Means v. Swormstedt, 32 Ind. 87, 
Chase v. Pattberg, 12 Daly (N, Y.) 2 Am. Rep. 330n ; Miller v. Roach, 
171 ; Merchants' Nat. Bank v. Clark, 150 Mass. 140, 22 N. E, 634. 6 L. R. 
139 N. Y. 314; Pomeroy v. Slade, 16 A. 71; Guthrie v. Imbrie, 12 Ore. 182, 
Vt. 220. 6 Pac. 664, 53 Am. Rep. 331 ; Halford 
"Dow V. Moore, 47 N. H. 419. v. Cameron's Coalbrookdale &c R 
'''Scanlan v. Keith, 102 111. 634, Co., 16 Q. B. 442, 20 L. J. Q. B. 
40 Am. Rep. 624, 644. In this case the 160; Aggs v. Nicholson, 1 Hurlst. 
court said: "Dealing with the cor- & N. 165. But see dissenting opinion, 
poration and taking a note made by See also, Scanlan v. Keith. 102 111. 
its officers, with its corporate seal 634, 40 Am. Rep. 624; Hood v. Hal- 
attached, it is most improbable lenback, 7 Hun (N. Y.) 362. 
plaintiff supposed he was obtaining "* Hitchcock v. Buchanan, 105 U. 
the individual note of the officers. S. 416, 26 L. ed. 1078. 
Had it been so the note would no 



15 GENERAL PRINCIPLES. § 284I 

has been held in New York to be the contract of the corporation 
alone.'^ But in the case last referred to, no special significance 
seems to have been attached to the circumstance that the bill was 
dated at the office of the company, further than may be gathered 
from a statement in the opinion of the court, that "there was 
clearly sufficient upon the face of the bill to indicate an intention 
to bind the company." So, a bill headed with the name of the 
office of an express and banking house, directed to be charged to 
"account of this office," and signed by a person as agent, was held 
by the Supreme Court of California not to be the personal obliga- 
tion of the agent, but that of the house." And similar rulings 
have been made by the courts of Montana and Nevada." In 
Massachusetts, also, a draft headed "Pompton Iron Works," 
directing that the amount of such draft be placed "to the account 
of the Pompton Iron Works," and signed, "W. Burtt, Ag't," was 
held to be the draft of the company, and not of the agent ;^' and 
a bank check having the words "^tna Mills" printed in the mar- 
gin and signed "I. D. Farnsworth, treasurer," was declared to 
be the check of the ^tna Mills, and not that of Farnsworth."" 
So, a draft headed "New England Agency of the Pennsylvania 
Fire Insurance Company," with the words "Foster and Cole, gen- 
eral agents for the New England states," printed in the margin, 
appearing on its face to be drawn upon such company in payment 
of a claim against it, and signed "Foster and Cole," without any 
addition to the signature, was adjudged by the same court to be 
the draft of the company, and not of Foster and Cole."^ But in 

^ Olcott V. Tioga R. Co., 27 N. Y. New York, where an action was 

546, 84 Am. Dec. 298. brought on a note containing in the 

" Sayre v. Nichols, 7 Cal. 535, 68 margin the printed words, "Bridge- 
Am. Dec. 280. wood Ice Co.," and running, "We 

"' Gerber v. Stuart, 1 Mont. 172 ; promise to pay," and which was 

Gillig V. Lake Bigler Co., 2 Nev. signed "John Clark, Prest." And "E. 

214. Compare Schaefer v. Bridwell, H. Close, Treas.," although the 

9 Nev. 209. note was given for the debt of the 

°° Fuller V. Hooper, 3 Gray ice company, a corporation, the 
(Mass.) 334. But compare Bank v. court held that as the note was 
Hooper, 5 Gray (Mass.) 567, 66 Am. negotiable and in the hands of an in- 
Dee. 390. nocent holder, it must be regarded 

°° Carpenter v. Farnsworth, 106 as the agreement of the ostensible 

Mass. 561, 8 Am. Rep. 360. maker, and that the appearance in 

^ Chipman v. Foster, 1-19 Mass. print, upon the margin, of the name 

189. But a contrary conclusion was of the corporation was not a fact 

reached by the court of appeals of carrying with it any presumption 



§ 2842 



AGENCY. 



16 



another case in the same jurisdiction, where the action, however, 
was against the acceptor of a draft, the signature was held to be 
such as to bind the acceptor personally."^ 

§ 2842, Ambiguity in instruments — Parol evidence held 
admissible. — A third class of cases consists of those in which 
it is held that parol evidence may be introduced to show what was 
the intention of the parties with reference to the matter, where, 
upon the face of a negotiable instrtiment, there is a doubt or 
ambiguity as to whether the contract is that of the principal or 
of the agent. A leading case upon this subject is one decided 
many years ago by the Supreme Court of the United States.^^ 



that the note was intended to be 
that of the company; hence the sign- 
ers were held hable personally. 
Casco Nat. Bank v. Clark, 139 N. Y. 
307, 34 N. E. 908, 36 Am. St. 705. 

°- Slawson v. Loring, 87 Mass. 340. 
The draft read: '"Office of Portage 
Lake Manufacturing Co., Hancock, 
Mich., June S, 1861. E. T. Loring, 
Agent, 39 State St,, Boston: At 
four months' sight, pay to the order 
of I. H. Slawson, four hundred dol- 
lars, and charge the same to ac- 
count of this company. ($400.00.) I. 
R. Jackson, Agt.' Written across 
the face of the draft were these 
words : 'Accepted June IS. E. T. 
Loring, Agent.' The question arose 
whether Loring was personally lia- 
ble as acceptor, and the court held 
that he, and not the company, was 
bound. The court said : 'Being nego- 
tiable paper, all evidence dehors the 
drafts is to be excluded. It is 
wholly immaterial that the defend- 
ant was in fact the agent of the 
company named on the face of the 
drafts, and that the plaintiff knew 
he was so, and that the defendant 
had no personal interest in the com- 
pany. Fuller V. Hooper, 3 Gray 
(Mass.) 334; Bank of British North 
America v. Hooper, 5 Gray (Mass.) 
567, 66 Am. Dec. 390; Draper v. 
Massachusetts Steam Heating Co., 
5 Allen (Mass.) 338. The rule ex- 
cluding all parol evidence to charge 
any person as principal, not dis- 
closed on the face of a note or draft, 
rests on the principle that each per- 
son who takes negotiable paper 



makes a contract with the parties on 
the face of the instrument, and with 
no other person. Taking the signa- 
ture of the defendant as acceptor 
written across the face of the drafts 
by itself, without reference to other 
parts of the instruments, it is clear 
that it would bind him personally.' " 
In this case, however, the question 
was as to the liability of the ac- 
ceptor, and not the drawer, so that 
there was probably less reason for 
giving the headings of the paper ef- 
fect. See generally, as to accept- 
ances and indorsements, Souhegan 
Nat. Bank v. Boardman, 46 Minn. 
293, 48 N. W. 1116; Rodney v. Wil- 
son, 61 Mo. 123, 29 Am. Rep. 499; 
Babcock v. Beman, 11 N. Y. 200; 
Davis V. Morgan, 64 N. Car. 570; 
Hill V. Shields, 81 N. Car. 250, 31 
Am. Rep. 499; Falk v. Moebs, 127 
U. S. 597, 8 Sup. Ct. 139, 32 L. ed. 
266; Ford v. Brown, 114 Tenn. 467, 
88 S. W. 103, 1 L. R. A. (N. S.) 
188, and note. 

■^ Mechanics' Bank v. Bank of Co- 
lumbia, 5 Wheat. (U. S.) 326, 5 
L. ed. 100. This was an action of 
assumpsit on a check reading as fol- 
lows: "Mechanics' Bank of Alexan- 
dria, June 25, 1817. Cashier of the 
Bank of Columbia: Pay to the or- 
der of P. H. Minor, Esq., ten thou- 
sand dollars ($10,000.00). (Sig.) 
Wm. Paton, Jr." The margin of 
the paper upon which the check was 
printed and written contained the 
printed words "Mechanics' Bank of 
Alexandria." The court held that 
It appeared doubtful on the face of 



1 7 GENERAL PRINCIPLES. § 2842 

There are many cases supporting this rule and showing its appli- 
cation. Thus, in Maryland, it has been held that where a bill, 
drawn by a corporation, was addressed to its treasurer, and ac- 
cepted by him by signing his name as treasurer of the corporation 
after the word "accepted" written across the face of the instru- 
ment, parol evidence was admissible to show that the acceptance 
was designed to be only in his official capacity.^* In a New 
Jersey case, a bill of exchange signed by one as "President Eliza- 
bethtown and Somerville R. R. Co.," there being nothing in the 
body of the instrument to show the nature of the obligation, was 
deemed ambiguous, and parol evidence was held admissible to 
determine whether it was the obligation of the company or of 
the president individually.*'^ In Alabama, in a suit by the payee 
against the drawer of a bill headed "Wetumpka, etc., R. Co., 
President's Office," and signed by one as "Pres't," parol evidence 
was held admissible to show that the company was the real prin- 
cipal.'" So, in Mississippi it has been decided that a bill of ex- 
change drawn by H and accepted by B, "agent of H," was ambig- 
uous, and that, as between the parties to the bill, parol evidence 
was competent to show that the intent was not to charge B per- 
sonally, but to charge H, whose funds were in B's hands."' In 

the check whether it was an official cumstances from which it might rea- 

or a private act, and that parol evi- sonably be inferred that it was either 

dence was, therefore, admissible to one or the other. In that case, it 

show that it was the official act of become indispensable to resort to 

Paton, the cashier of the Mechanic's extrinsic evidence to remove the 

Bank. "The appearance of the cor- doubt." 

porate name -of the institution on the "Laflin v. Sinsheimer, 48 Md. 411, 

face of the paper," said the court, 30 Am. Rep. 472. 

"at once leads to the belief that it °°Kean v. Davis, 21 N. J. L. 683, 

is a corporate, and not an individual 47 Am. Dec. 182 ; Reeve v. First Nat. 

transaction; to which must be added Bank, 54 N. J. L. 208, 23 Atl. 853, 

the circumstances that the cashier is 16 L. R. A. 143, 33 Am. St. 675. 

the drawer, and the teller the payee "Wetumpka &c. R. Co. v. Bing- 

[facts which had been given in evi- ham, 5 Ala. 657. 

dence dehors the check] ; and the *' Hardy v. Pikher, 57 Miss. 18, 

form of ordinary checks deviated 34 Am. Rep. 432. "Ordmarily," said 

from by the substitution of to order Chalmers, J., "no extrinsic testimony 

for to bearer. The evidence, there- of any kind is admissible to vary or 

fore, on the face of the bill, pre- explain negotiable instruments. Such 

dominates in favor of its being a paper speaks its own language, and 

bank transaction. * * * But it is the meaning which the law affixes to 

enough for the purposes of the de- it cannot be changed by any evidence 

fendant to establish that there ex- aliunde. One of *e few exceptions 

isted, on the face of the paper, cir- to this rule is where anything oa 

2 — Contracts, Vol. 4 



§ 2842 AGENCY. 18 

Texas a note which ran: "We, the trustees of C. H. College, 

promise to pay," signed by several persons with their own names 
merely, was held to be prima facie the note of the signers ; but 
extrinsic evidence to show an intention to bind the corporation 
was held admissible."^ And in Colorado, where the action was by 
the drawee against the acceptor of certain drafts, accepted by 
"F. D. H., treasurer," drawn on "S. A. R.," and directed to be 
charged to account of "S. L. S. N. Co.," a corporation, it was 
held that the trial court erred in sustaining a demurrer to the plea 
which alleged that the defendant was the treasurer of the com- 
pany ; that the bill was given for an indebtedness of the company 
to the plaintiff; that it was his duty as treasurer to pay out all 
moneys of the company in his hands on the order of the company, 
and to accept, as its treasurer, all orders or bills drawn by the com- 
pany on its treasurer and pay the same when due if he had suffi- 
cient funds in his hands, belonging to the company, to do So ; 
that he accepted the bill as treasurer of the company and not 
otherwise; that when the bill became due there was no money of 
the company in his hands, and that the plaintiff had knowledge 
of all the facts before set out."" In a recent case in Indiana, the 
Supreme Court held, — contrary to many of its previous decisions, 
of which there seemed to be two conflicting lines, — that a note 
dated at the office of a corporation, running "We promise to pay," 
and signed, "R. J. Beatty, president," was not conclusively the 
obligation of Beatty, but that it could be shown by extrinsic evi- 
dence that it was a corporate note. Many of the cases were 
reviewed and most of the decisions supporting the rule admitting 
extrinsic evidence were cited.''" 

the face of the paper suggests a was that the payee should look to 

doubt as to the party bound, or the the principal whose name was dis- 

character in which any of the sign- closed in the signature of his agent, 

ers acted in affixing his name, in or who was well known to be the 

which case testimony may be admit- true party to be bound." 

ted between the original parties to '"Traynham v. Jackson, 15 Tex. 

show the true intent. Thus, where 170, 65 Am. Dec. 152. Compare Con-. 

one has signed as agent of another, tinental Nat. Bank v. Heilman, 81 

while the prima facie presumption is Fed. 36 affd., 86 Fed. 514, 30 C. C. 

that the words are merely descriptio A. 232. 

personae, and that the signer is in- ™ Hager v. Rice, 4 Colo. 90, 34 

dividually bound, yet it may be Am. Rep. 68. 

shown, in a suit between the parties, ™ Second Nat. Bank v. ^Midland 

that it was not so intended, but that, Steel Co., 155 Ind. 581, 58 N. E. 

on the contrary, the true intention 833, 52 L. R. A. 307. And this seems 



19 



GENERAL PRINCIPLES. 



§ 2843 



§ 2843. Cases in which parol evidence was excluded. — 

In other cases, not much less numerous, the rule admitting parol 
evidence has been denied or refused application, at least when the 
question was not as between the original parties, notwithstanding 
the facts were, in most instances, similar to those in some of the 
cases referred to in the last preceding section. A distinguishing 
feature in some instances, however, is as to whether the principal 
or the nature and extent of the ambiguity was in any way dis- 
closed. In a number of cases it has been held that one whose name 
does not appear upon the instrument cannot be charged as princi- 
pal where nothing upon its face indicates agency or tends to show 
intention to bind the principal.'^ So, among the cases in which 



to be the tendency of the more mod- 
ern decisions, as shown by the fol- 
lowing authorities, most of which 
are cited in above Indiana case. See 

4 Thompson Corp., § 5141, et seq. 
See, also. Baker v. Gregory, 28 Ala. 
544, 65 Am. Dec. 366; Bean v. Pio- 
neer Min. Co., 66 Cal. 451, 6 Pac. 
86, 56 Am. Rep. 106; Hovey v. Ma- 
gill, 2 Conn. 680; Webb v. Burke, 

5 B. Mon. (Ky.) 51 ; Haile v. Peirce, 
32 Md. 327, 3 Am. Rep. 319; Bar- 
low V. Congregational Soc, 8 Allen 
(Mass.) 460; Paige v. Stone, 10 
Mete. (Mass.) 160, 43 Am. Dec. 420; 
Keidan v. Winegar, 95 Mich. 430, 
54 N. W. 901, 20 L. R. A. 705n; 
Pratt V. Beaupre, 13 Minn. 187; Pe- 
terson V. Homan, 44 Minn. 166, 46 
N. W. 303, 20 Am. St. 564; Krani- 
ger V. People's Bldg. Soc, 60 Minn. 
94, 61 N. W. 904; Smith v. Alex- 
ander, 31 Mo. 193; Musser v. John- 
son, 42 Mo. 74, 97 Am. Dec. 316; 
Gillig V. Lake Bigler Co., 2 Nev. 
214; Brockway v. Allen, 17 Wend. 
(N. Y.) 40; Bank of Genesee v. 
Patchin Bank, 19 N. Y. 312; New- 
man V. Greeff, 101 N. Y. 663, 5 N. 
E. 335; Baldwin v. Bank of New- 
bury, 1 Wall. (U. S.) 234, 17 L. ed. 
534; Richmond &c. R. Co. v. Snead, 
19 Grat. (Va.) 354, 100 Am. Dec. 
670. But in some of the cases the 
question arose only between the orig- 
inal parties, and in nearly all of 
them the principal was in some way 
disclosed, or there was, for soma 
reason, an ambiguity that could not 
well be made clear in any other way. 



See 1 Elliott Ev., § 616, note 324. 
And in the course of the opinion it 
was said: "If a bill of exchange is 
complete in itself, free from any 
latent ambiguity, obviously carrying 
its passport upon its face, there is 
no need of oral testimony to aid in 
its exposition. The clear and intel- 
ligible terms of such an instrument 
may not be explained by extrinsic 
evidence. This is a familiar rule of 
constant application in the interpre- 
tation of written contracts. Can it 
be said that the drafts in question 
belong to this class? That upon 
their face it is proclaimed to the 
world that Hayer was acting in his 
individual capacity in accepting 
them? Or rather, would not the 
more natural construction be that 
these drafts were drawn by the 
principal, the company (whose name 
appears on the face of the instru- 
ment), by its president, upon its 
treasurer, as such? Giving to each 
word its appropriate meaning, con- 
sidering each instrument in every 
part, and as a whole, and having ref- 
erence to well established commer- 
cial usage, as to the mode of draw- 
ing bills of exchange by a corpora- 
tion upon itself, we do not hesitate 
in our conclusion that the drafts in 
controversy must have been under- 
stood, especially if the averments 
in the third plea are true, as having 
been accepted by the treasurer as 
such, and not as an individual." 

'^ Moragne v. Richmond Locomo- 
tive Works, 124 Ala. 537, 27 So. 



§ 2843 AGENCY. 



20 



parol evidence to explain an alleged ambiguity has been excluded 
are the following : Where one signed a promissory note with the 
addition of the word "trustee" to his name it was held that he was 
personally liable thereon, and that testimony was not admissible 
to show a contemporaneous parol agreement that the signer 
should not be personally liable, but that the note was to be 
paid out of a trust fund." This decision was, however, based 
largely upon the principle mentioned by Story, that trustees, 
guardians, executors, and the like, are generally held personally 
liable on notes, because they have no authority to bind, ex 
directo, the persons for whom or for whose benefit or estates 
they act, although even they might exempt themselves 
from personal liability by using clear and explicit words to 
show that intention.'^ In another case the contract read, "We 
promise to pay," and was signed by two persons with the addi- 
tions, "president school board" and "secretary school board," but 
without any reference in the body to any particular school district. 
It was held to be the personal contract of the signers, and not va- 
riable by parol.'* So, where bills of exchange were directed to be 
paid to "A. B., agent," and indorsed by "A. B., agent," it was 
held that the agent was personally liable; and parol evidence 
to show that the indorsers were agents of the drawers was ex- 
cluded, on the ground that the defendants appeared on the face 
of the bills to be themselves the payees and indorsees, the word 

240; Junge v. Bowman, 72 Iowa 648, Rep. 829; Keokuk Falls Imp. Co. 

34 N. W. 612; New York &c. L. v. Kingsland &c. Mfg. Co., 5 Okla. 

Ins. Co. V. Martindale, 75 Kans. 32, 47 Pac. 484. But see as between 

142, 88 Pac. 559, 21 L. R. A. (N. S.) original parties, Keidan v. Winegar, 

1045, 121 Am. St. 362, and note 95 Mich. 430, 54 N. W. 901, 20 L. 

citing other cases. See, also, Hately R. A. 705n ; Brunswick-Balke-Collen- 

V. Pike, 162 in. 241, 44 N. E. 441, 53 der Co, v. Boutell, 45 Minn. 21, 47 N. 

Am. St. 304; Hypes v. Griffin, 89 111. W. 261; Tarver v. Garlington, 27 S. 

134, 31 Am. Rep. 71 ; Prescott v. Car. 107, 2 S. E. 846, 13 Am. St. 628. 

Hixon, 22 Ind. App. 139, 53 N. E. And see as to the liability of principal 

391, 72 Am. St. 291 ; Matthews v. on original consideration. Coaling 

Dubuque Mattress Co., 87 Iowa 246, Coal &c. Co. v. Howard, 130 Ga. 807, 

54 N. W. 225, 19 L. R. A. 676n; 61 S. E. 987, 21 L. R. A. (N. S.) 1051, 

Davis V. England, 141 Mass. 587, 6 1073, and note. 

N. E. 731 ; Sparkes v. Dispatch Trans- " Conner v. Clark, 12 Cal. 168, 1?> 

fer Co., 104 Mo. 531, 15 S. W. 417, Am. Dec. 529. 

12 L. R. A. 714n, 24 Am. St. 351; "Story Prom. Notes, § 63. 

Robinson v. Kanawha &c. Bank, 44 "Wing v. GHck, 56 Iowa 473, 41 

Ohio St. 441, 8 N. E. 583, 58 Am. Am. Rep. 118. 



21 GENERAL PRINCIPLES. § 2844 

"agent" in each case being treated as designatio personarum." It 
has also been held that where a person executes a negotiable in- 
strument in his own name, without disclosing his principal or his 
own character as agent, if in point of fact he was acting as agent 
for another, the signer will be personally liable on such instru- 
ment, and evidence to .show the agency will not be received." 
This case does not contravene the proposition, however, that such 
evidence might be admitted if the word "agent" or something 
equivalent had been added to the signature, and the controversy 
were between the original parties, and, as already shown, there 
are many decisions admitting extrinsic evidence where there is 
ambiguity and the controversy is between the original parties.''^ 

§ 2844. Principal held liable in equity. — In still another 
class of cases it is held that the principal may be liable in equity, 
or the instrument so corrected or reformed as to hold him even 
though not otherwise liable at law. These cases hold that al- 
though such an instrument, signed by one as "agent" without dis- 
closing the name of the principal on the face thereof, would, in 
an action at law, bind the agent only, yet that in a suit in equity 
it might be enforced against the principal," or that it might be re- 
formed so as to carry out the intention and make him liable, in a 
proper proceeding for that purpose.'^ 

§ 2845. Difference in rule as to negotiable instruments 
when question is between original parties from that when in 
hands of innocent third party. — ^There is much reason for mak- 

" Tucker Mfg. Co. v. rairbanks, 98 Pentz v. Stanton, 10 Wend. (N. Y.) 

Mass. 101 ; Bartlett v. Hawley, 120 271, 25 Am. Dec. 558. 

Mass. 92. "Thomson v. Davenport, 2 Smith 

"Webster v. Wray, 19 Nebr. 558, Lead. Cas. ill, and notes; Baker v. 

56 Am. Rep. 754, citing 1 Daniel Neg, Gregory, 28 Ala. 544, 65 Am. Dec. 

Instr 284. 2>(>^; Warrick County v. Butter- 

"See further, Hypes v. Griffin, 89 worth, 17 Ind. 129; Kenyon v. Wil- 

111 134; Scanlan v. Keith, 102 111. liams, 19 Ind. 44; Davison v. Daven- 

634 40 Am. Rep. 624 ; Hayes v. Mat- port Gas-Light Co., 24 Iowa 419 ; 

thews, 63 Ind. 412, 30 Am. Rep. 226 ; Clark's Exr. v. Van Riemsdyk, 9 

Williams v. Second Nat. Bank, 83 Cranch (U. S.) 153, 3 L. ed. 688. 

Ind. 237; Prather v. Ross, 17 Ind. "Lee v. Percival, 85 Iowa 639, 52 

495- Benham v. Smith, 53 Kans. 495, N. W. 543. See, also, Capital Sav. 

i() Pac 997- Keidan v. Winegar, 95 Bank &c. Co. v. Swan, 100 Iowa 718, 

Mich 430, 54 N. W. 901, 20 L. R. 69 N. W. 1065; Matthews v. Du- 

A 705 and note ; Robinson v. Kana- buque Mattress Co., 87 Iowa 246, 54 

wha Valley Bank. 44 Ohio St. 441; N. W. 225, 19 L. R. A. 676n. 
Anderton v. Shoup, 17 Ohio St. 125; 



§ 2845 AGENCY. 



22 



ing a distinction or some difference in the application of the rule 
as to the admissibility of parol evidence, in cases of negotiable in- 
struments, depending upon the manner in which, or the parties 
between whom, the question arises, and the courts in this country 
incline to apply the rule against the admission of parol evidence 
more strictly in cases where the instrument before maturity has 
passed into the hands of an innocent holder for value than in 
actions between the original parties, or between the original 
maker or drawer on the one hand and a third party who acquired 
it with notice on the other.^" These decisions have been criti- 
cized upon the ground that the right to introduce parol evidence 
depends, not upon the actual knowledge that the interested parties 
may have of the transaction upon which the contract is founded, 
but upon the fact that there is an ambiguity on the face of the in- 
strument ; and that the ambiguity, if it exists, will continue until 
the paper has come into the possession of the third party, and 
must be as obvious to him as it is to the judge who pronounces it 
ambiguous.*^ But there seems to be no good reason for applying 
a more rigid rule of construction to negotiable instruments than 
to other simple contracts in writing, except that by reason of their 
negotiable character such instruments become a kind of circu- 
lating medium and should be protected while in the hands of inno- 
cent holders. The ordinary course of business and public policy 
require this and permit such instruments to pass upon their face 
as "couriers without luggage." 

As between the original parties, however, the paper is no more 
sacred than any other simple contract. "Third parties who ac- 
quire such an instrument in the course of business may, of course, 
also be affected by an ambiguity upon the face thereof, but it must 
be so obvious and apparent as to put them upon inquiry. For 

'"Haile v. Peirce, 32 Md. 327, SSL. ed. 100; Metcalf v. Williams, 

Am. Rep. 139; Hardy v. Pilcher, 57 104 U. S. 93, 26 L. ed. 665. See 

Miss. 18, 34 Am. Rep. 432; Martin also, Mechem Agency. 443; 1 Dan. 

V. Smith, 65 Miss. 1, 3 So. 33; Smith Negot. Instr., 418; 1 Elliott Ev, 916; 

V. Alexander, 31 Mo. 193 ; Brock- Shaffer v. Hohenschild, 2 Kans. App. 

way V. Allen, 17 Wend. (N. Y.) 40; 516, 43 Pac. 979; Megowan v. Peter- 

Casco Nat. Bank v. Clark, 139 N. son, 173 N. Y, 1, 65 N. E, 738; note 

Y. 307, 34 N. E. 908, 36 Am. St. 70S ; to Keidan v. Winegar, 20 L. R. A. 

Roberts v. Austin, 5 Whart. (Pa.) 70S. 

313; Mechanics' Bank v. Bank of "^ Huffcutt Ele. of Ag., § 190. 
Columbia, 5 Wheat. (U. S.) 326, 



23' GENERAL PRINCIPLES. § 2846 

example, in England it is the custom with some agents to sign, 
'C. D., by procuration of A. B. ;' but this is ambiguous, and the 
words 'by procuration' are held to be an express intimation of 
special and limited authority, and sufficient to place the person 
taking an instrument so drawn, accepted, or indorsed, upon his 
inquiry as to the extent of the agent's authority/' The arbi- 
trary doctrine of descriptio personarum ought not to be extended 
so as to fasten obligations upon those who in fact never assumed 
them, unless absolutely required by the rules of law."'^ As was 
said in a Michigan case: "The rule that rejects words added to 
the signature is an arbitrary one. Its reason is not so much that 
the words are not, or may not be, suggestive, but that they are but 
suggestive, and the instrument, as a whole, is not sufficiently com- 
plete to point to other parentage. The very suggestiveness of 
these added words has given rise to an irreconcilable confusion in 
the authorities as to the legal effect of such an instrument. Ex- 
trinsic evidence, therefore, is admissible in such cases, between 
the immediate parties, to explain a suggestion contained on the 
face of the instrument, and to carry out the contract actually 
entered into as suggested, but not fully shown by the note itself. 
The presumption that persons dealing with negotiable instruments 
take them on the credit of the parties whose names appear should 
not be absolute in favor of the immediate payee, from whom the 
consideration passed, who must be deemed to have known all 
the facts and circumstances surrounding the inception of the note, 
and with such knowledge accepted a note containing such a sug- 
gestion."** 

§ 2846. Summary of the most approved doctrine as to ne- 
gotiable instruments. — As already stated, there is much con- 
flict among the authorities and it is difficult to formulate any sat- 
isfactory rules upon the subject without making them too in- 
definite or general in terms to be of much practical benefit, but it 

'=1 Daniel Neg. Instr., § 299, and ''Reinhard Agency, § 219. 
cases cited. See, also, as to what "McGrath, J., in Keidan v. Wine- 
is sufficient to put purchaser on in- gar, 95 Mich. 430, 54 N. W. 901, 20 
quiry, note in 29 L. R. A. 351 ; Ford L. R. A. 705. See, also, 1 Daniel 
V. Brown, 114 Tenn. 467, 88 S. W. Nego. Ins'tr., § 418; Mechem Agency, 
1036, 1 L. R. A. (N. S.) 188, and § 443. 
note. 



§ 2846 AGENCY. 24 

is believed that the following summary made by a comparatively 
recent writer, who was also a judge of the Indiana Appellate 
Court, is supported by the weight of authority and the better 
reason: "i. A negotiable instrument may be drawn, accepted, 
or indorsed by an authorized agent so as to bind only his principal 
when, either by the recitals or the signature, he discloses the prin- 
cipal and makes it appear that he, the agent, is 'the mere scribe 
who applies the executive hand as his instrument;' or that the 
principal but speaks through him. * * * 2. A negotiable in- 
strument attempted to be drawn by an authorized agent for his 
principal will bind the agent personally, if neither in the recitals 
thereof, nor in the signature or elsewhere, the principal is named 
or referred to, although the signer has described himself by add- 
ing to his own name such appellations as 'agent,' 'trustee,' 'presi- 
dent,' 'treasurer,' etc., such words being regarded merely as de- 
scriptio personae ; and extrinsic evidence is not admissible to show 
that another is the real obligor. 3. If a negotiable instrument of 
the description last above given, in addition thereto contain upon 
its face, or in the headings or marginal memoranda, the name of 
the principal, so as to indicate that it was the intention to bind the 
principal and not the agent, the court will, by construing the 
various recitals, memoranda, headings, etc., together, and with- 
out extrinsic evidence, declare it to be the obligation of the prin- 
cipal only, when the controversy is between the original parties. 
4. If a negotiable instrument of the description given in sum- 
mary 2, in addition thereto contain upon its face, or in the head- 
ings or marginal memoranda, some suggestions that the signer 
may have been acting merely as agent or representative of an- 
other, whether his name appear or not, the instrument, while still 
prima facie the personal obligation of the agent, will generally be 
regarded as sufficiently ambiguous, if the controversy be between 
the immediate parties, or between the drawer or maker and a 
holder thereof with notice or knowledge of the facts, to warrant 
the admission of parol evidence to show such facts, in order to 
exonerate the agent. 5. As to all negotiable instruments in 
which the paper, on its face, in respect of the question as to which 
of two persons is the real obligor, shows such ambiguity as to 



25 GENERAL PRINCIPLES. § 2847 

put an ordinarily prudent business man upon his inquiry, parol 
evidence is admissible to solve the ambiguity even as against an 
otherwise innocent holder, -who acquired the paper before matur- 
ity and for a valuable consideration. 6. In the case stated in : 
summary 5, even though there be no ambiguity, yet if it be as- 
serted that the principal was in the habit of transacting that class 
of business in the name of the agent, or that the name of the agent ■ 
was the principal's trade name, parol evidence is admissible to 
prove such fact, either between the immediate parties, or against 
a third party who took the paper with notice or knowledge there- 
of ; and to prove that fact it may be shown that in the course of 
dealing between the original parties the name adopted in the par- 
ticular contract under dispute had become the common name by 
which the obligation of the principal was expressed."*^ 

§ 2847. Sealed instruments — Execution by agent. — Sealed 
instruments were regarded at common law as the highest class 
of instruments; and although the importance of the seal has been 
greatly diminished by the decisions of the courts, and its use no 
longer required under many of the statutes, as shown in the first 
volume of this work, it is still true that many of the common-law 
rules as to deeds and instruments that were required to be under 
seal are still in force. Among such rules is that against the ad- 
mission of parol testimony to vary the writing. But, while the 
instrument should show that it is the deed of the principal rather 
than the act of the agent for himself, and this is usually done in 
the body as well as by the signature, no set form of words is 
required, and it is sufficient if it appears from a consideration of 
the whole instrument."' Thus, in a Kentucky case, it was said : 

■^ Reinhard Agency, § 220, citing, Garlington, 27 S. Car. 107, 2 S E. 
on the last proposition; Hovey v. 846, 13 Am. St. 628; Devendorf v. 
Magill 2 Conn. 680; Pease v. Pease, West Virginia Oil &c. Co., 17 W. 
35 Conn. 131, 95 Am. Dec. 22s ; Mil- Va. 135. ,n^ .^ ri„ „, 
ligan V. Lyle, 24 La. Ann. 144; Mel- =° Story Ag. (9th ed), §153; Hale 
ledge V. Boston Iron Co., 5 Cush. v. Woods, 10 N. H. 470, 34 Am Dec. 
(Mass.) 1S8, 51 Am. Dec. 59; Ger- 176; Kansas City v. Hannibal &a R. 
ber V. Stuart, 1 Mont. 172; Bank of Co., 77 Mo. 180. See also Ball v. Dun- 
Rochester V. Monteath, 1 Denio sterville, 4 T R. 313 ; Wilburn v. Lar- 
(N Y ) 402, 43 Am. Dec. 681 ; Rum- kin, 3 Blackf. (Ind.) 55; Bahon- 
sev V Briggs, 139 N. Y. 323, 34 nons v. Lewos, 3 T. B. Mon. (Ky ) 
N E '929- Metcalf v. Williams, 104 376; Berkey v. Judd, 22 Minn 287; 
U S 93 126 L. ed. 665. See, also, Spencer v. Field, 10 Wend. (N. Y.) 
as to the last proposition. Tower v. 88. The following form was held 



§ 2847 AGENCY. 26 

"The attorney should act in the name of his principal, and not in 
his own name merely. There is no inflexible rule as to the mode 
in which this is to be done ; and when both names are to be used 
both in the caption or body and signature of the instrument, it is 
a question of intention and construction, whether the act is done, 
or the engagement made, in the name of the principal or of the 
agent. The terms of the covenant itself are commonly decisive 
as to intention. The description in the caption and the mode of 
signature are referred to, either as aids in discovering the inten- 
tion, or as determining whether the form of the instrument corre- 
sponds with this intention, so that it may be carried out. If, in 
view of all its parts, the instrument can be regarded as the deed or 
covenant of the party intended to be bound, it must, on principle, 
be so regarded. There is, we believe, no difference of opinion 
with regard to the propriety of these positions, though there 
doubtless may be in their application."" And a lease in which 
"Edward F. Lawrence, president of the Northwestern Distilling 
Company," described himself as the party of the second part, and 
in which the testimonium clause was as follows : "In testimony 
whereof the said parties have hereunto set their hand and seals," 
signed "Northwestern Distilling Company (seal), by Edward 
Lawrence, president," — was held well executed, and binding on 
the company, and not on Lawrence personally.^^ And a deed 
signed "A. B., by C. D., his attorney in fact," has been held 
sufficient without reciting the grant by the principal in the body 
of the deed.'^ It is said that a conveyance which reads: 

sufficient to bind the principal in But- also, Babcock v. Collins, 60 Miiin. 

terfield v. Beall, 3 Ind. 203: "This 12,, 61 N. W. 1020, 51 Am. St. 503. 

indenture, made * * * between J. But a quitclaim deed with the name 

C. W., * * * attorney in fact for of the grantee left blank, though 

A. B. and R. B., * * * parties of delivered by the owner to his agent, 

the first part, and J. B., * * * has been held not to confer author- 

of the second part, witnesseth, that ity on the agent to authorize a broker 

the said J. C. W., party of the first to bind the owner by contract of sale, 

part, * * * hath granted," etc. Ballou v. Carter (S. Dak.), 137 N. 

"In witness whereof the said J. C. W. 603. 

W., attorney, hath hereunto set their "Hunter v. Miller, 6 B. Mon. 

hands and seals," etc. "A. B. (seal) (Ky.) 612. See, also. Carter v. Doe, 

* * * R. B. (seal) * * * By J. 21 Ala. 72; Magill v. Hinsdale, 6 

C. W. (seal), their attorney in fact." Conn. 464, 16 Am, Dec. 70. 

And the same view was taken in a " Northwestern DistilKng Co. v. 

similar case in Missouri. Hubbard Brant, 69 111. 658, 18 Am. Rep. 631. 

V. Swofford Bros. Co., 209 Mo. 495, " Tidd v. Rines, 26 Minn. 201, 2 N. 

108 S. W. IS, 123 Am. St. 488. See, W. 497. 



27 GENERAL PRINCIPLES. § 2848 

"Know all men by these presents that I, A. B., as agent of C. D., 
do hereby grant, sell, convey," etc., is the deed of A. B. and not 
of C. D. ; and this is true, Story says, although he sign the instru- 
ment "A. B., for C. D. ;" for while, in such cases, the testimonium 
clause and the signature and seal purport to be those of the prin- 
cipal, the granting clause not purporting to be that of the prin- 
cipal, it is only the deed of the agent, and not that of the prin- 
cipal.^" And where a deed recited, "Know all men by these pres- 
ents that the N. England Silk Co., a corporation, by C. C, their 
treasurer," etc., "do hereby grant," etc., and the testimonium 
clause was, "In witness whereof, I, the said C. C, in behalf- of 
said company, and as their treasurer, do hereunto set my hand 
and seal. C. C, treasurer of N. England Silk Co.," — such deed 
was held not properly executed to be a good deed of the corpora- 
tion."^ As already intimated there is a tendency to relax the rigid 
rules of the common law, and many of the statutes have greatly 
ameliorated their rigor."^ So, an instrument ineffective to convey 
title because of want of a formal execution may be binding in 
equity."^ And in Alabama it is held that the fact that the com- 
mon-law requirement of seals on deeds of conveyance of lands 
has been abolished does not change the rule as to the execution 
of such instruments by agents."* But when the instrument is not 
one as to which a seal is required, the rules applicable to sealed 
instruments do not apply, even though it is executed under seal, 
and the seal will be treated as surplusage."^ 

§ 2848. Consequences of defective execution. — If the agent 
fail to execute a deed so as to bind the principal, it may not bind 
either one or it may bind the agent himself but not the principal. 

'"Story Ag. (9th ed.), § 148. vada &c. Min. Co., 32 Cal. 639, 91 

"Brinley V. Mawn, 2 Cush. (Mass.) Am. Dec. 602; Johnson v. Johnson, 

337, 48 Am. Dec. 669. But compare 1 Dana (Ky.) 364; McNaughton v. 

Hubbard v. Swofford Bros. Co., 209 Partridge, 11 Ohio 223, 38 Am. Dec. 

Mo. 495, 108 S. W. 15, 123 Am. St. 731; Welsh v. Usher, 2 Hill Ch. (S. 

488 Car.) 167, 29 Am. Dec. 63; Daugh- 

"' See Gibbs v. Dickson, 33 Ark. trey v. Knolle, 44 Tex. 450, 

107; Simpson v. Garland, 72 Maine "Jones v. Morris, 61 Ala. 518. 

40, 39 Am. Rep. 297n; Warner v. °° Steele v. McElroy, 1 Sneed 

Mower, 11 Vt. 385; Bryan v. Stump, (Tenn.) 341; Stowell v. Eldred, 39 

8 Gratt. (Va.) 241, 56 Am. Dec. 139. Wis. 614 Kirschbon v. Bonzel, 67 

'" Salmon v. Hoffman, 2 Cal. 138, 56 Wis. 178. 
Am. Dec. 322; Love v. Sierra Ne- 



§ 2849 AGENCY. 28 

In the latter case the only effect is usually to render the agent 
liable in damages, but if his authority is coupled with an interest 
it may have the effect of alienating the subject-matter pro tanto. 
"If an agent undertakes to execute a deed of conveyance for 
his principal, to do which he has been duly authorized, and fails 
to make an effectual conveyance of the land, it is apparent that 
the deed is entirely void so far as conveying anything by it is 
concerned. The title of the land being in the principal, the per- 
sonal deed of the agent would not convey it, of course. Such a 
deed is therefore void."" However, if the agent should himself 
have an interest in the land, it is easily seen that by his personal 
deed he would convey at least his own interest, and to that extent 
the deed would be a valid conveyance, as to such interest, but 
no further. Or if the instrument be a bond for the payment of 
money, and the agent has bound himself by apt words, the bond 
will be valid so as to bind the agent, as an obligor, although void 
as to the principal.""^ Thus, it is held that where an agent under- 
takes to execute a bond on behalf of his principal, and in the body 
of the instrument writes, "I promise to pay," etc., and signs him- 
self "John Smith, agent of William Jones," — William Jones, the 
principal, incurs no liability, as no one purports to act for him; 
but John Smith is liable on the bond, for he has promised to 
pay.°^ And an agent may incur liability upon a deed if it con- 
tains covenants of warranty in his own name, even though de- 
scriptive words are added."" 

§ 2849. Undisclosed principal — Parol evidence to hold lia- 
ble. — Although extrinsic evidence will not ordinarily be re- 
ceived to vary or contradict a written instrument, such evidence 
may be admissible to charge an undisclosed principal, or one who, 
though disclosed, is not named in the instrument. The purpose 
of such evidence is not, however, to vary or contradict the con- 

" Fowler v. Shearer, 7 Mass. 14; "^ Fowler v. Shearer, 7 Mass. 14; 

McNaughten v. Partridge, 11 Ohio Elwell v. Shaw, 16 Mass. 42, 8 Am. 

223, 38 Am. Dec. 731. Dec. 126. 

"Reinhard Agency, § 225. See, "'Mitchell v. Hazen, 4 Conn. 495, 

also, Bedell v. Scarlett, 75 Ga. 56 ; 10 Am. Dec. 169 ; Ogden v. Raymond, 

Stewart v. Postal Tel. &c. Co., 131 22 Conn. 379, 58 Am. Dec. 429. 
Ga. 31, 61 S. E. 1045, 18 L. R. A. 
(N. S.) 692, 127 Am. St. 205. 



29 



GENERAL PRINCIPLES. 



§ 2849 



tract or exonerate the agent but to show the true nature of the 
transaction where the contract is ambiguous or to show who is 
the real party making the contract whether he does so in his own 
name or that of another, and to give effect to the estabHshed rule 
of law that an undisclosed principal may, upon his disclosure, be 
held to a contract made in his behalf by an authorized agent. 
This branch of the subject is treated in the first volume of this 
work, but reference is also made to the authorities cited below.^ 



'See Vol. 1, § 466; 3 Elliott Ev., 
§ 1640; note in 24 L. R. A. (N. S.) 
315, 316; Higgins v. Senier, 8 M. & 
W. 834, 844; Trueman v. Loder, 11 
Ad. & El. 589. That parol evidence is 
admissible, see Powell v. Wade, 109 
Ala. 95, 19 So. 500, 55 Am. St. 915, 
and note ; Curran v. Holland, 141 Cal. 
437, 75 Pac. 46; Exchange Bank v. 
Hubbard, 62 Fed. 112, 10 C. C. A. 
295; Byington v. Simpson, 134 Mass. 
169, 45 Am. Rep. 314; Ford v. Wil- 
liams, 21 How. (U. S.) 287, 16 L. 
ed. 36. As to when undisclosed 
principal is liable, see cases above 
cited, and, also, Henderson v. May- 
hew, 2 Gill (Md.) 393, 41 Am. Dec. 
434; Taintor v. Prendergast, 3 Hill 
(N. Y.) n, 38 Am. Dec. 618. To 
same effect, Woodford v. Hamilton, 
139 Ind. 481, 39 N. E. 47; Yough- 
iogheny Iron &c. Co. v. Smith, 66 
Pa. St. 340; Sanger v. Warren, 91 
Tex. 472, 66 Am. St. 913, reviewing 
many cases, and also showing ex- 
ceptions or qualifications of the rule. 
Among the exceptions in some, _ if 
not most, jurisdictions are sealed in- 



struments and negotiable instru- 
ments, and cases in which there has 
been an election. See note in 29 
L. R. A. (N. S.) 472, as to excep- 
tions to right of undisclosed princi- 
pal to sue; and note in Ann. Cas. 
1912C. 633, or to rule where contract 
involves personal trust and confidence 
in agent. Also, Shields v. Coyne, 
148 Iowa 313, 127 N. W. 63, 29 L. 
R. A. (N. S.) 472. As to rights 
and remedies of undisclosed principal 
and when subject to set-off, plea of 
payment or the like, see Eldridge 
v. Finninger (Okla.), 105 Pac. 334, 
28 L. R. A. (N. S.) 227, and valuable 
note in which the authorities are col- 
lected and reviewed; also note in 39 
L. R. A. (N. S.) 324. See also, 
Western Union Tel. Co. v. North- 
cutt, 158 Ala. 539, 48 So. 553, 132 
Am. St. 38; Eldridge v. Finninger 
(Okla.), 105 Pac. 334, 28 L. R. A. 
(N. S.) 227 (as to when a party is 
justified in treating agent as owner) ; 
Battev v. Lunt, 30 R. I. 1, 11 Atl. 
353, 136 Am. St. 926, and note. 



CHAPTER LX. 

ATTORNEYS AT LAW. 

§ 28SS. Attorneys — Attorneys at law. § 2862. Attorney's knowledge and 

2856. Attorneys in fact. skill considered with ref- 

2857. General relation of attorney erence to locality. 

and client — The retainer, 2863. Attorney's liability for neg- 

2858. Authority of attorney to ap- ligence. 

pear — By whom, how, and 2864. Duty of attorney to obey in- 
when it may be questioned. structions. 

2859. When and how far client is 2865. Duty of attorney to account 

bound by act of attorney. and pay over. 

2860. Duty of attorney to client 2866. Compensation of attorney. 

— Confidential communica- 2867. Attorney's lien. 

tions. 2868. Attorneys in fact — Power of 

2861. Attorney's duty to exercise attorney. 

skill and care — Liability for 
negligence. 

§ 2855. Attorneys — Attorneys at law. — In a general sense, 
an attorney is one who is put in the place or turn of another. 
"It is an ancient English word and signifieth one that is set in the 
turn, stead or place of another; and of these some be private, 
* * * and some be public, as an attorney at law, whose war- 
rant from his master is ponit loco suO' talen attornatum suum, 
which setteth in his turn or place such a man to be his attorney."^ 
Attorneys are of two kinds — attorneys at law and attorneys in 
fact. An attorney at law is an officer in a court of justice, who 
is employed, and in fact whose profession and business usually re- 
quire him to try cases in court and give legal advice to those who 
employ him for that purpose.^ In this country the term "attor- 
ney" or "practicing attorney" ordinarily means an attorney at 
law, unless a contrary meaning is indicated by the context.^ His 
professional business, in this country, is not confined to the prepa- 
ration and trial of cases in court, but may embrace such work 
as collections of notes and other claims, without suit, the ex- 

^ Coke Lit., sib. ' Ingram v. Richardson, 2 La. Ann. 

^Anderson Law Die. and Bouvier 839. 
Law Die, tit. Attorney. 

30 



3 1 ATTORNEYS AT LAW. § 2856 

aminations of titles to property, the conduct of negotiations for 
settlements of estates, compromises of threatened legal contro- 
versies, and the like.* An attorney at law is an officer of the 
court in which he practices, although not a public officer in the 
ordinary sense of the term.° He is a quasi officer, though not 
in the full or strict sense a public officer of the state where jus- 
tice is administered by the court in which he practices." 

I § 2856. Attorneys in fact. — An attorney in fact is defined 
as a private or special agent appointed for some particular pur- 
pose not connected with a proceeding at law, by a formal au- 
thority called a letter or power of attorney, in which is expressed 
the particular act or acts for which he is appointed and the ex- 
tent of his authority.' "The term is employed to designate per- 
sons who act under a special agency, or a special letter of attor- 
ney, in that they are appointed in factum for the deed, or special 
act, to be performed ; but in a more extended view it includes all 
other agents employed in any business or to do any act or acts 
in pais for another."^ 

§ 2857. General relation of attorney and client — The re- 
tainer. — The relation of attorney and client, like that of other 
cases of principal and agent, generally grows out of a contract 
of employment, which in this case is called a "retainer."^ The 
attorney must, as a general rule at least, be retained before he 
can be considered authorized to appear in an action either to 
prosecute or to defend; but the employment may be established 
by implication, as in other cases of agency.^" "The payment of 

* See National Sav. Bank v. Ward, ° Bouvier Law Die, tit. Attorney. 

100 U. S. 195 ; Moore v. Staser, 6 Ind. " See Bouvier Law Die, tit. Re- 

App. 364, 32 N. E. 563, 33 N. E. 665. tainer; Blackman v. Webb, 38 Kans. 

"Matter of Burchard, 27 Hun (N. 668, 17 Pac. 464. The retaining fee 

Y.) 429; Leigh's Case, 1 Munf. is also often called the retainer. 

(Va.) 468, 483. Ex parte Garland, '"A retainer in a particular case 

4 Wa;ll. (U. S.) 333, 18 L. ed. 366. does not authorize the attorney to 

See also. Crafts v. Lizotte (R. I.), 84 appear in an independent case or col- 

Atl. 1081. lateral proceeding not part of the 

" Matter of Mosness, 39 Wis. 509, same case or matter. Jacobs v. Cope- 

20 Am. Rep. 55. Not a public offi- land, 54 Maine 503. But it does, or- 

cer; Ingersoll v. Howard, 1 Heisk. dinarily, give authority to do all in- 

(Tenn.) 247; Ex parte Garland, 4 cidental acts necessary to accomplish 

Wall. (U. S.) 333, 18 L. ed. 366. the main purpose. Day v. Welles, 31 

See, also, Ex parte Yale, 24 Cal. 241, Conn. 344; Scott v. Elmendorf, 12 

85 Am. Dec. 62. Johns, (N. Y.) 315. See, also, and 

'3 Am. & Eng. Encyc. L. (2d ed.) 
281. 



§ 2857 AGENCY. 32 

a fee is the most usual and weighty item of evidence to establish 
the relationship of client and attorney, but it is by no means 
indispensable. The essential feature of the professional relation 
is the fact of employment to do something in the client's behalf. 
There must be an agreement, expressed or implied, for compen- 
sation, but whether payment is made in part or in whole by re- 
tainer in advance is not material. Nor is it even indispensable 
that the compensation should be assumed by the client. Ordi- 
narily, it is so from the nature of the employment, which in the 
vast majority of cases involves the guarding or enforcement of 
the client's interest against an adverse one, and is therefore ex- 
clusive. But even adverse interests, if to be amicably adjusted, 
may be represented by the same counsel, though the cases in 
which this can be done are exceptional and never entirely free 
from danger of conflicting duties. "^^ Where an attorney appears 
for a party in a case in court, his authority to appear will be pre- 
sumed in the absence of anything to the contrary ;^^ but this pre- 
sumption may be rebutted by evidence of his nonemployment 
or want of authority.'^ The court may, and should, when prop- 
erly moved, call upon any attorney who appears in a case, to 
show his authority;^* but in the absence of such a showing, as 
already stated, authority of the attorney to make such appearance 
may be presumed.^^ And if a party desires to question the au- 

compare, Bacon v. Mitchell, 14 N. mas, 12 Colo. 46, 20 Pac. 771, 13 Am. 

Dak. 454, 106 N. W. 129, 4 L. R. A. St. 204. 

(N. S.) 244, and note; Sheffer v. "Gartwell v. Menifee, 2 Ark. 356; 

Perkins, 83 Vt. 185, 75 Atl. 6, 25 L. State v. Houston, 3 Harr. (Del.) 15 ; 

R. A. (N. S.) 1313 and note; Tobler Belt v. Wilson, 6 J. J. Marsh. (Ky.) 

V. Nevitt, 45 Colo. 231, 100 Pac. 495, 22 Am. Dec. 88 ; Roselius v. Del- 

416, 23 L. R. A. (N. S.) 702, 132 Am. achaise, 5 La. Ann. 481, 52 Am. Dec. 

St. 142n. 597; Prentiss v. Kelley, 41 Maine 

" La Wall V. Groman, 180 Pa. St. 436; Board of Comrs. v. Purdy, 36 

532, :il Atl. 98, 57 Am. St. 662. Barb. (N. Y.) 266; Hollins v. St. 

"2 Elliott Gen. Pr. 473; Hunter Louis &c. R. Co., 57 Plun (N. Y.) 
V. Bryant, 98 Cal. 247, 33 Pac. 51; 139, 11 N. Y. S. 27; Allen v. Green, 
Leslie V. Fischer, 62 111. 118; Castle v. 1 Bailey (S. C.) 448; Ex parte Gil- 
Bell, 145 Ind. 8, 44 N. E. 2; Hars- lespie, 3 Yerg. (Tenn.) 325. See also, 
ley V. Blackmarr, 20 Iowa 161, 89 Miller v. Continental Assur. Co., 233 
Am. Dec. 520; Kelso v. Stigar, 75 Mo. 91, 134 S. W. 1003, Ann. Cas., 
Md. 376, 24 Atl, 18; Nelson v. Jenks, 1912C. 102, and note. 
51 Minn. 108, 52 N. W. 1081 ; Brown "* Wheeler v. Cox, 56 Iowa 36, 8 
V. Nichols, 42 N. Y. 26, 9 Abb. Pr. N. W. 688; Kerr v. Reece, 27 Kans. 
(N. S.) 1. See also, Scott v. Roys- 469; Louisville &c. R, Co. v. New- 
ton, 223 Mo. 568, 123 S. W. 454. some, 13 Ky. L. 174; Postal Tel. 

"Great West. Min. Co. v. Wood- Cable Co. v. Louisville, N. O. & T. 



;^2 ATTORNEYS AT LAW. § 285S 

thority of an attorney to appear, such party should make a proper 
showing and is usually required to file a written motion verified 
by affidavit, stating not only the fact of such lack of authority, 
but the grounds for the belief that such is the case/" The author- 
ity, it has been held, cannot be contested by plea or answer." It 
has also been held that an attorney in regular practice cannot 
be called upon to produce his authority to appear in a case unless 
he has received previous notice requiring him to do so.^' But 
where a person who had not been admitted to practice as an at- 
torney was employed as attorney in a case it was held that he 
might be required to file a written authority with the clerk.^® 

§ 2858. Authority of attorney to appear — By whom, how, 
and when it may be questioned. — The question as to whether 
an attorney has the authority to appear may be raised by either 
party to a suit f° but it has been held that the adverse party can 
raise the question only by showing that his rights are in some 
way prejudiced, or that he has been disturbed or 'vexed by being 
brought into litigation without the consent of the other party.^^ 
A mere stranger to the record has no right to question the au- 
thority of an attorney in a cause.^^ And it has been held that 
the adverse party cannot raise the objection that the opposing 
counsel has not procured a license from the United States gov- 

R. Co., 43 La. Ann. 522, 9 So. 119; der v. McDowell, 46 La. Ann. 393, IS 

Stefife V. Old Colony R. Co., 156 So. 21. 

Mass. 262, 30 N. E. 1137; Osborn v. "Robinson v. Robinson, 32 Mo. 

Bank of United States, 9 Wheat. App. 88; North Brunswick v. Boo- 

(U. S.) 738, 6 L. ed. 204. An attor- ream, 10 N. J. L. 257. 

ney who appeared for an infant was " Beckley v. Newcomb, 24 N. H. 

presumed to be authorized to do so 359. 

by the infant's next friend in Hilliard "Stevens v. Fuller, 55 N. H. 443. 

V. Carr, 6 Ala. 557. Rules of court also often largely reg- 

'° People V. Mariposa Co., 39 Cal. ulate the matter of appearance and 

683; Savery v. Savery, 8 Iowa 217; the question of showing authority. 

Louisville &c. R. Co. v. Newsome, 13 "■ People v. Mariposa Co., 39 Cal. 

Ky. L. 174; Valle v. Picton, 91 Mo. 683. 

207, 3 S. W. 860; Watrous v. Kear- "' M'Alexander v. Wright, 3 T. B. 

ney, 79 N. Y. 496; People v. Lamb, Hon. (Ky.) 189, 16 Am. Dec. 93n. 

32 N. Y. S. 584; 85 Hun (N. Y.) 171; See also. State v. Crumb, 157 Mo. 

Standefer v. Dowlin, 1 Hemp. (U. 545, 557, 57 S. W. 1030. 

S.) 209, Fed. Cas. 13284a. An affida- '"See, Miller v. Continental Assur. 

vit is not, however, always deemed Co., 233 Mo. 91, 134 S. W. 1003, Ann. 

necessary, and oral evidence has been Cas. 1912C. 102 ; Bryans v. Taylor, 

held sufficient to take its place. Ben- Wright (Ohio) 245. 

3 — Contracts, Vol, 4 



§ 2858 AGENCY. 34 

ernment.^^ The objection as to the authority of the attorney 
must be raised before plea or answer, and at the earliest oppor- 
tunity.^* 

The question of authority or no authority may be determined 
by the court, if there be no jury, or by the jury if there be one ; it 
has been held a question of fact such as a jury has the right 
to pass upon." When the authority of an attorney is seasonably 
and appropriately questioned, it then devolves upon the party 
who questions such authority to produce some proof of the lack 
of such authority; and the burden is on the attacking party to 
prove, or at least to produce evidence to prove, that the appear- 
ance is unauthorized.^" The presumption in such cases is in favor 
of the authority, as attorneys who are officers of the court must 
be presumed to have done their duty ; and in such case the maxim 
applies that "all acts are presumed to have been rightly and regu- 
larly done."^' In one case where the party represented by an 
attorney himself denied such attorney's authority under oath, it 
was held that fhe burden was upon the attorney to prove such 
authority ;^^ yet where an appearance has been regularly entered 
by an attorney and an order made, if the party against whom 
such order was entered denies the authority of the attorney to 
enter such appearance, the burden is on such party to prove that 
the appearance by the attorney was without authority.^" The 
authority may be shown by an express contract of employment, 
such as a letter from the client or a power of attorney, or by 
parol evidence raising a reasonable presumption of the existence 

=" Harrington v. Edwards, 17 Wis. Mutual Life Ins. Co. v. Pinner, 43 

506 84 Am. Dec. 768. See, however, N. J. Eq. 52, 10 Atl. 184; Holder v. 

Cobb. V. Judge, 43 Mich. 289, 5 N. State, 35 Tex. Cr. App. 19, 29 S. W. 

W 309 793; Thomas v. Steele, 22 Wis. 207; 

'* Indianapolis, B. & W. R. Co. v. Schlitz v. Meyer, 61 Wis. 418. 

Maddy, 103 Ind. 200, 2 N. E. 574; =" Coke Litt. 6b, 332. See, also, 1 El- 

Beckly v. Newcomb, 24 N. H. 359; liott Ev. § 104; Rex v. Verelst, 3 

People V. Lamb, 85 Hun (N. Y.) Camp. 432, per Ld. Ellenborough, 

171 65 N. Y. St. 839, 32 N. Y. S. C. J. ; Faulkner v. Johnson, 11 M. & 

584'- Rowland v. Gardner, 69 N. Car. W. 581 ; Rice v. Bamberg, 59 S. Car, 

53 498, 38 S. E. 209. See, also. Miller 

"= Clark V Holliday, 9 Mo. 711; v. Continental Assur, Co., 233 Mo. 

Howard v. Smith, 33 N. Y. Super. 91. 134 S. W. 1003, Ann. Cas. 1912C. 

Ct. 124, 35 N. Y. Super. Ct. 131 ; 102, and note. 

Newhart v. Wolfe, 2 Penny. (Pa.) "'Dangerfield v. Thurston, 8 Mart. 

295; Henderson v. Terry, 62 Tex. 281. (N. S.) (La.) 119. 

""Stubbs V. Leavitt, 30 Ala. 352; ""Dey v. Hathaway, etc., Co., 41 

Bonnifield v. Thorp, 71 Fed. 924; N. J. Eq. 419. 



35 ATTORNEYS AT LAW. § 2859 

of proper authority.*" Where the question was whether the at- 
torney had sufficient authority to bind his cHent by a notice to 
take depositions served upon such attorney, it was held that proof 
of the fact that the attorney, who lived in the same town with 
the client, had previously represented him in a criminal prosecu- 
tion, connected with the civil suit, was sufficient, in the absence 
of rebutting testimony, to show that he was the authorized at- 
torney and that the service of such notice was binding.*^ But 
the mere fact of previous employment is not of itself sufficient 
proof of the relation in the particular transaction in question, 
and it has been said that it only furnishes evidence of a presump- 
tion of such relation when there is no evidence to the contrary.*^ 

§ 2859. When and how far client is bound by act of attor- 
ney. — The authorized acts of an attorney at law are binding 
upon the client, in general, as in the case of any other agent, when 
such acts are within the scope of his authority ;'' and notice to him 
of facts gained in the course of employment, the very business as 
to which he Is employed, is imputed to his client f* but it is usually 
otherwise as to knowledge acquired by the attorney in another 
transaction.'" If the attorney has been negligent in the conduct 
of legal proceedings, and the negligence has proved injurious to 
the client, the latter cannot ordinarily set up such negligence as an 
excuse, any more than if he had himself been guilty of it. Thus, 
an injunction will not be granted against a judgment on the 
ground that the attorney was negligent.'" So, where an at- 

°° Rogers v. Park, 23 Tenn. 480. see, as to authority to compromise, 

See, also, Hughes v. Osborn, 42 Ind. Hall v. Wright, 138 Ky, 71, 127 S. W. 

450; Eickman v. Trolly, 29 Minn. 516, Ann. Cas., 1912A. 1255 ; Jennings 

124; Hardin v. Ho-Yo-Po-Nubby, 27 v. South Whitley &c. Co. (Ind. App.), 

Miss. 567. 98 N. E. 194. 

"Coffin V. Anderson, 4 Blackf. •" Wittenbrock v. Parker, 102 Cal. 

(Ind.) 395. 93, 24 L. R. A. 197, 41 Am. St. 172; 

''Hoover v. Greenbaum, 61 N. Y. Sweeney v. Pratt, 70 Conn. 274, 66 

305, affd. 91 U. S. 308, 21 L. ed. Am. St. 101. 
392; Ex parte Lynch, 25 S. Car. 193. "^Wyllie v. Pollen, 3 De. G., J. & 

''Wood V. Wood, 59 Ark. 441, 28 S. 596; Atchison, T. & S. F. R. Co. 

L R. A. 157, 43 Am. St. 42 ; Beck v. Benton, 42 Kans. 698, 22 Pac. 698 ; 

V. Bellamy, 93 N. Car. 129. See, Vietor v. Spalding, 199 Mass. 52, 84 

also, 2 Elliott Gen. Pr., § 473; N. E. 1016, 127 Am. St. 472; Trentor 

Reynolds v. Fleming, 30 Kans. 106, 1 v. Pothen, 46 Minn. 298, 24 Am. St. 

Pac. 61, 46 Am. Rep. 86; Payton v. 22Sn; Melms v. Pabst Brewing Co., 

McQuown, 97 Ky. 757, 31 S. W. 874, 93 Wis. 153, 57 Am. St. 899n. 
17 Ky. L. 518, S3 Am. St. 437n, 31 '» Payton v. McQuown, 97 Kv. 757, 

L. R. A. 33 and note; Bank v. Mc- 31 S. W. 874, 17 Ky. L. 518, 33 
Ewen (N. Car.), 76 S. E. 222. But 



§ 286o AGENCY. 36 

torney, with full authority in the premises, neglects to file and 
prosecute a claim against the estate of an insolvent debtor, the 
creditor cannot be excused for the laches on account of the failure 
of his attorney to act." And when an authorized attorney is 
present in court when an order is made granting a new trial as of 
right, under a statute, and fails to object, the client affected there- 
by is presumed to have consented to the order.^* Not only is the 
client deprived of any relief from the injurious consequences 
naturally following, from the negligent or other wrongful con- 
duct of the attorney, but the client may be personally liable to any 
third party who sustains an injury which proximately results 
therefrom.^' 

§ 2860. Duty of attorney to client — Confidential communi- 
cations. — Like any other agent, an attorney owes certain gen- 
eral duties to his client, but he also owes certain duties peculiar 
to the particular relation. An attorney at law is bound to 
observe toward his principal, the client, the utmost good faith ; 
the relation between them is one of the most sacred and con- 
fidential, and he must, therefore, as expressed in one of the 
statutory provisions, "maintain inviolate the confidence, and at 
every peril to himself, preserve the secrets of his client."^" He 
cannot, ordinarily, be compelled to reveal his client's secrets, even 
in a court of justice. Confidential communications should not be 
disclosed except with the consent of the client.*^ Attorneys who 
betray confidence reposed in them and thereby injure their client 
are liable therefor. After an attorney has been retained in a matter 
by a client, he cannot, consistently with professional duty, act for 

I 

Am. St. 437n, 31 L. R. A. 33, and also, Moore v. Horner, 146 Ind. 287, 

note, in which many other cases are 45 N. E. 341. 

cited and reviewed. But compare "'Harvey v. Fink, 111 Ind. 249, 12 

Citizens' Nat. Bank v. Branden, 19 N. E. 396. 

N. Dak. 489, 126 N. W. 102, 27 L. '"Foster v. Wiley, 27 Mich. 244, 15 

R. A. (N. S.) 858, where it is held Am. Rep. 185. 

that neglect of an attorney consti- " Burns Ind. Rev. Stat. 1901, § 979, 

tuted surprise entitling the client to clause 5. 

open a default. As shown in the *" Weeks Atty's at Law (■2d ed.), 

note to that case, however, the weight § 310. Jenkinson v. State, S Blackf. 

of autliority is the other way, at least (Ind.) 465; Bigler v. Reyher, 43 Ind. 

where the matter is not controlled 112. I5ut see Doherty v. O'Callaghan, 

by statute. 157 Mass. 90, 17 L. R. A. 188, and 

"Leo V. Green, 52 N. J. Eq. 1. See note, 34 Am. St. 258. 



2i7 ATTORNEYS AT LAW. § 286 1 

the opposing party in the same matter, or in matters directly con- 
nected therewith ; and this is usually true where he has been con- 
sulted even though as yet there may have been no express formal 
retainer for further services in the matter." If, in the course of 
his employment, an attorney learns of defects in his client's title, 
he cannot take advantage thereof to the latter's detriment without 
laying himself liable to him." So, if he attempt to represent con- 
flicting interests, he may render himself liable in damages to one 
and sometimes both of his clients.** 

§ 2861. Attorney's duty to exercise skill and care — Lia- 
bility for negligence.— An attorney is bound to exercise skill 
and care in the performance of his trust. He holds himself out 
as possessing, to a reasonable extent, the knowledge and skill re- 
quired in the proper performance of his professional duties ; and 
if he does not possess these, or fails to exercise ordinary or rea- 
sonable skill, care, and diligence, he will be liable in damages, in a 
proper case, for any injury resulting to his client.*^ He is not lia- 
ble, however, for every mistake that may occur in his practice, 
and if he has fair capacities and knowledge, and employs a reason- 
able degree of care and attention, he will not be liable.*^ If doubt 
exists as to any legal proposition, or if well-informed lawyers 
may properly differ as to the same, he will not be held liable under 
ordinary circumstances for his error, if such his advice or act 

'"Wilson V. State, 16 Ind. 392; Fitch v. Scott, 34 Am. Dec. 86. He 

Price V. Grand Rapids &c. R. Co., is required to possess and exercise 

18 Ind. 137. See also, Pilling v. Ben- such knowledge and skill as are or- 

son (R. I.), 84 Atl. 1005. dinarily possessed and exercised by 

" Cumberland Coal &c. Co. v. Sher- members of his profession, at least 

man, 30 Barb. (N. Y.) 553; Gal- by those- in the locality. II Shear- 

braith v. Elder, 8 Watts (Pa.) 81; man & Redf. Neg. (5th ed.), § 558; 

Ringo V. Binns, 10 Pet. (U. S.) 269, Cooley on Torts (3d ed.), 779; Hil- 

9 L ed 420. legass v. Bender, 78 Ind. 225; Fould 

"See Donaldson v. Haldane, 7 CI. v. Falls, 91 Ind. 315; Kepler v. Jes- 

& F 762. See, also, Taylor v. sup, 11 Ind. App. 241, 2,7 N. E. 655, 

Blacklow, 3 Scott 614, 3 Bing. N. 38 N. E. 826. 

Cas. 235, 32 E. C. L. 116; Arnold v. "Cox v. Sullivan, 7 Ga. 144, SO 

Robertson, 3 Daly (N. Y.) 298. Am. Dec. 386; Kepler v. Jessup, 11 

« Walker v. Stevens, 79 111. 193; Ind. App. 241, 37 N. E. 6S5, 38 N. E. 

Gilbert v. Williams, 8 Mass. 51, S 826; Watson v. Muirhead, 57 Pa. St. 

Am Dec. 77; Von Wallhoffen v. 161, 98 Am. Dec. 213 ; Tuley v. Bar- 

Newcombe, 10 Hun (N. Y.) 236; ton, 79 Va. 387. See, also. Hill v. 

Harter v. Morris, 18 Ohio St. 492; Mynatt (Tenn.), 59 S. W. 162, 52 

Watson V. Muirhead, 57 Pa. St. 161, L. R. A. 883, and numerous cases 

98 Am. Dec. 213. See, also, note to there reviewed in the note. 



§ 286l AGENCY. 38 

should prove to be as to such matter ; nor would he be liable for 
any error of judgment as to new and undecided points.*' He 
may assume the law to be correctly decided by the Supreme Court 
of his own state, even though such decisions be subsequently over- 
ruled.** He must, however, know the settled rules of pleading 
and practice, and must use ordinary care in the preparation of his 
cases for trial.*" In a case in New York, where a statute regu- 
lating proceedings in attachment required an affidavit to be filed 
showing the existence of a cause of action and that the plaintiff 
was entitled to recover the sum stated over and above all counter- 
claims, and an attachment was dissolved because the affidavit did 
not state the source of affiant's information, it was held by the 
federal court that the attorney who prepared the affidavit was not 
liable to his client in damages for the omission, the decisions of 
the lower courts being in conflict as to the requirement of such 
statement in the affidavit, and the Court of Appeals not having 
passed upon the question.'*'' But it is said that an attorney must 
keep pace with the literature of the profession ; and if a principle 
of law has been established by the decision of a court which has 
been reported and published a sufficient length of time to have be- 

" Stevens v. Walker, SS III. ISl; able to secure a loan applied for, 

Citizens' Loan &c. Assn. v. Friedley, by one of its shareholders, and it 

123 Ind. 143, 23 N. E. 107S, 7 L, R. was shown that the title to such 

A. 669, 18 Am. St. 320; Babbitt v. real estate was held by the share- 

Bumpus, 75 Mich. 331, 41 N. W. 417, holder and his wife as tenants by 

16 Am. St. 585; Hill v. Mynatt the entireties. The borrower died 

(Tenn.), 59 S. W. 165, 52 L. R. A. before the loan was repaid, and his 

883, and note. wife successfully resisted a suit for 

" Citizens' Loan &c. Assn. v. Fried- the foreclosure of the mortgage 

ley, 123 Ind. 143, 23 N. E. 1075, 7 given to secure the loan, her de- 

L. R. A. 669, 18 Am. St. 320; Marsh fense being, that she signed the note 

V. Whitmore, 21 Wall. (U. S.) 178, and mortgage merely as the surety 

22 L. ed. 482. See, also, Hastings of her husband. The Supreme Court 

V. Hallock, 13 Cal. 203. decided that although, if the rule, that 

" Citizens' Loan &c. Assn. v. Fried- in such cases a mortgage given by 
ley, 123 Ind. 143, 23 N. E. 1075, 7 the husband and wife was void as 
L. R. A. 669, 18 Am. St. 320. In re to both, had been clearly established 
Bolton, 9 Beav. 272, 10 Jur. 22. See, by the decisions of the court before 
also, Varnum v. Martin, 15 Pick, the advice was given, the attorney 
(Mass.) 440; Joy v. Morgan, 35 would have been liable for the dam- 
Minn. 184, 28 N. W. 237, and note ages sustained, yet that as such had 
in 52 L. R. A. 884 never been the ruling of that court 

°°Ahlhauser v. Butler, 57 Fed. 121. up to that time, the mistake of such 

So, in a case in Indiana, a building and advice was not such as could be 

loan association was advised by its said to have resulted only from the 

attorney that the title to a parcel of want of ordinary knowledge and 

real estate was perfect and avail- skill, or from the failure to exercise 



39 ATTORNEYS AT LAW. § 3862 

come known to those who exercise reasonable diligence, and such 
attorney has failed to inform himself thereof, and his client has 
suffered from his ignorance, he will be liable for such damages as 
the client has sustained thereby." An attorney should also know 
or act in view of the statutes of his state, and the settled rules 
of pleading and practice of his court f^ and it has been held that, 
if he undertakes to sue out a writ in a court of peculiar constitu- 
tion, he must ascertain the machinery the court has with which 
to carry out the objects of the action."* 

§ 2862. Attorney's knowledge and skill considered with 
reference to locality. — But the skill and knowledge of an at- 
torney must be considered with reference to the locality in which 
he practices, unless he undertakes that he has knowledge of the 
law of the jurisdiction with reference to which he is engaged to 
transact the business. Hence it has been held that if he should 
fail to inform his client that under the law of a foreign state a 
building contract must be registered in order to be binding upon 
the parties to it, when the law of that state so requires, he will not 
be liable on account of his ignorance, although he was employed to 
draw a contract that would in all respects be binding on the par- 
ties, the mere acceptance of the employment not being a sufficient 
tacit agreement that he would draw the contract so as to make it 
binding by the laws of such foreign state."* Indeed the principle 
is carried even further, for an attorney may not hold himself out 
as possessing full knowledge and skill in all branches; and the 
litigation, practice and class of attorneys in the locality may be 
such that he could not reasonably be expected to possess the 
knowledge and skill in various branches that might be possessed 
by a more favored class in great commercial centers and the like. 

reasonable care and caution. Citi- °'Cox v. Leech, 1 C. B. (N. S.) 

zens' Loan &c. Assn. v. Friedley, 123 617. But see Hill v. Mynatt (Tenn.) 

Ind 143, 23 N. E. 1075, 7 L. R. A. 59 S. W. 163, 52 L. R. A. 883. 

669, 18 Am. St. 320. "Fenaille v. Coudert, 44 N, J. L. 

" Reinhard on Agency, § 419 ; Good. 286. So, it is the duty of the client 

man v. Walker, 30 Ala. 482, 68 Am. to truly state the facts, and an attor- 

Dec 134; Citizens' Loan &c. Assn. ney is not liable where he acts prop- 

V Friedley 123 Ind. 143, 23 N. E. erly on the facts as stated to him. 

1075, 7 L. R. A. 669, 18 Am. St. 320. Lee v. Dixon, 3 F. & F. 744. 

='Godefroy v. Dalton, 6 Bing. 460, 
19 E. C. L. 210. 



§ 2863 AGENCY. 



40 



§ 2863. Attorney's liability for negligence. — It is, in gen- 
eral, the duty of an attorney at law to enter upon the performance 
of his undertaking as contemplated by his employment, and to 
pursue the task diligently until completed. If an attorney who 
has a claim placed in his hands for collection delays bringing suit 
beyond a reasonable time, and the claim is lost by reason of such 
negligence on his part, he may be held liable therefor in dam- 
ages.^^ But when an attorney has obtained judgment on a claim 
in favor of the client, and sued out execution, he will usually be 
justified in ceasing to take further steps — such as additional exe- 
cutions — whenever he is influenced, in good faith, by a prudent 
regard for the interest of his client, not to pursue the matter fur- 
ther, and will not be liable, though he has not asked for further 
instructions, unless he has disobeyed the positive directions of 
the client, although as a general rule it may perhaps be stated to 
be the duty of the attorney not only to sue out mesne and final 
process, but subsequent writs of execution, when the first proves 
inadequate.'" An attorney is not bound to institute new and col- 
lateral suits, such as actions against the sheriff or other officers 
for failing to do their duty, nor to attend to the levy of an execu- 
tion, nor to search for property out of which to make the debt, 
as these are the duties of the sherifT.^' But it has been held that, 
if there is a forthcoming bond with surety, it is incumbent upon 
him to pursue such surety thereon, and he is guilty of negligence 
for failing to do so.°^ Where an attorney has undertaken on 
behalf of a mortgagee to see that a mortgage is a first lien on 
the property of the mortgagor, he is liable to such mortgagee for 
a failure to use reasonable care and skill in performing that 
duty f* and in such case it seems that the mortgagee need not wait 
until he has foreclosed his mortgage, but may, if he can establish 
the injuiy and damage, sue and recover from the attorney the 
difference between the value of the security contracted for and 

"'McArthur v. Baker, 7 Ky. L. "LaWall v. Groman, 180 Pa. St. 

441. 532, i7 Atl. 98, 57 Am. St. 662. 

•^^ Pennington's Exrs. v. Yell, 11 "" LaWall v. Groman, 180 Pa. St. 

Ark. 212, 52 Am. Dec. 262. 432, Z7 Atl. 98, 57 Am. St. 662. 

" Pennington's Exrs. v. Yell, 11 

Ark. 212, 52 Am. Dec. 262. 



41 ATTORNEYS AT LAW. § 2863 

that actually received, the cause of action being the breach of 
duty, and not the damages, which are only an incident."" 

It is, of course, the duty of an attorney at law, in cases in court, 
to prepare all the pleadings and take all necessary steps in the 
progress thereof, and for a failure to discharge his duty, in whole 
or in part, he will be liable to his client in such damages as the 
latter may have sustained."^ It seems that he is not liable, how- 
ever, for the result of any unskilful pleadings filed in a case 
by another attorney, and before his connection with it."^ He 
is liable for negligence in failing to make proper preparations 
for the trial, such as the summoning of witnesses, and simi- 
lar duties."' Like other agents employed for the perform- 
ance of a particular task, he may be required to perform the 
same in person." But the retainer of a member of a legal firm 
is equivalent to a retainer of all the members thereof, and, in the 
absence of anything to the contrary, any one of such members 
may conduct the case."° Whether an attorney has been negligent 
in any matter entrusted to him may be a question of fact for the 
jury, unless the facts are undisputed, in which case it is a question 
of law for the court."" The burden of establishing negligence 
is, of course, on the party asserting it."^ To entitle the plaintiff 
to recover, however, it must be proved that some injury has re- 
sulted to the client."^ Thus, where an attorney had a claim for 
collection, it was held in an action of negligence against the attor- 
ney that the plaintiff was required to show, not only that it was 
a valid debt, but that the debtor was solvent."" Where no injury 
is shown proof of negligence will entitle the plaintiff to nominal 
damages only.''" It is, moreover, the duty of the client, in case 

™See Hunter v. Caldwell, 10 Q. B. »" Hunter v. Caldwell, 10 Q. B. 69; 

69; Walker v. Goodman, 21 Ala. 647. Gambert v. Hart, 44 Gal. 542. 

"Walsh V. Shumway, 65 111. 471. "See Pennington's Exrs. v. Yell, 

See, also, Russel v. Palmer, 2 Wils. 11 Ark. 212, 52 Am. Dec. 262; 

325; Godefroy v. Jay, 7 Bing. 413, Holmes v. Peck, 1 R. I. 242. See, 

5 Moore & P. 284. also, Hubbard v. EUithorpe, 135 

■^Lowry v. Guilford, S C. & P. Iowa 259, 112 N. W. 796, 124 Am. 

234, 24 E. C. L. 542. See, also, St. 271. 

Stephens v. White, 2 Wash. (Va.) "'Palmer v. Ashley, 3 Ark. 75; 

203. Spiller v. Davidson, 4 La. Ann. 171. 

°= Mercer v. King, 1 F. & F. 490. '"Pennington's Exrs. v. Yell, 11 

"Eggleston v. Boardman, 7,1 Mich. Ark. 212, 52 Am. Dec. 262. 

14. '"Nave v. Baird, 12 Ind. 318. 

"Eggleston v. Boardman, 37 
Mich. 14. 



§' 2864 AGENCY. 42 

of negligence by the attorney, to do all he can to avert the injury; 
and hence, if a client discharge an attorney on account of his neg- 
ligence, and the judgment taken by said attorney could then be 
collected by execution, it is the client's duty to have execution 
issued ; and, on failure to do so, he cannot recover the damages ■ 
from the attorney if the debt be ultimately lost, the attorney being 
liable for nominal damages only, for, in that case, the client's 
own negligence must be regarded as the proximate cause of the 
loss." So, where the executors of a client sued an attorney for 
damages for improper advice, and the trial court refused to 
charge for the defendant that if the jury believed the plaintifif's 
testator had acted from other motives than the advice given him 
by the defendant then the plaintiffs were not entitled to recover, 
it was held on appeal that the refusal so to charge was error. ''^ 

§ 2864. Duty of attorney to obey instructions. — As a gen- 
eral rule, matters relating to the cause of action or subject-matter 
of the litigation are under the exclusive control of the client, and 
the attorney cannot ordinarily compromise, surrender or impair 
the same; but the proceedings in court relating to the manner of 
enforcing the right and the course of proceeding are usually 
largely, if not exclusively, within the control of the attorney; but 
the line of demarcation is not very exactly or clearly defined, 
and there is some apparent conflict among the decided cases.'" 

■" Read v. Patterson, 11 Lea client attempts to make a settle- 

(Tenn.) 430. ment or the like, especially after 

"Cochrane v. Little, 71 Md. 323, judgment. See Weeks v. Wayne Cir- 

18 Atl. 698. See Reinhard Agency, cuit Judges, 73 Mich. 256, 41 N. W. 

§ 420. 269; Coughlin v. New York &c. R. 

"See note to Cameron v. Boeger, Co., 71 N. Y. 443, 27 Am. Rep. 75; 

200 111. 84, 65 N. E. 690, as reported National Exhibition Co. v. Crane, 

in 93 Am. St. 165. Also, notes in 167 N. Y. 505, 60 N. E, 768; Illinois 

87 Am. Dec. 166, 4 L. R. A. (N. S.) Cent. R. Co. v. Wells, 104 Tenn. 706, 

244, 23 L. R. A. (N. S.) 702, 25 L. 59 S. W. 1041; note to Hanna v. 

R. A. (N. S.) 1313. So, as shown Island Coal Co., 51 Am. St. 246, 276, 

in the same notes, especially the note and note first above referred to. 

to the case first above referred to. Compare Boogren v. St. Paul City R. 

courts have often refused to recog- Co., 97 Minn. 51, 106 N. W. 104, 3i 

nize stipulations on agreements of L. R. A. (N, S.) 379, and note, as 

a party outside of court as to the to no lien usually existing or pre- 

conduct of the proceedings not con- venting compromise in case of ac- 

sented to by his attorney of record ; tion in tort for personal injury. See, 

and there are cases in which the at- however, Miedreich v. Rank, 40 Ind. 

torney has such a lien or interest App. 393, 82 N. E. 117. 
that it will be protected where the 



43 ATTORNEYS AT LAW. § 2865 

Except as to matters of minor detail, and those things about 
which the attorney possesses special and technical information, 
it is safer, at least, for an attorney to follow the instructions of 
his client, since for failure to do so he may render himself liable to 
the latter for any damages sustained as a result thereof/* In 
case of doubt it is the duty of counsel to advise his client 
what he believes is the best course to pursue ; and if thereupon the 
client chooses to disregard the advice and pursue his own course, 
the attorney may safely follow the client's instructions, and it is 
perhaps safer for him to do so than otherwise.'"* In many things 
he is bound at his peril to obey implicitly. Thus, if an attorney be 
instructed to sue on a claim placed in his hands, it has been held 
that it is his duty to obey, and that for a failure to do so he will 
be liable for any loss the client may suffer, without regard to 
whether or not the attorney acted in good faith and did what he 
regarded as being for the best interest of his client.''" But, in 
the absence of specific instructions, the attorney has a wide dis- 
cretion, and, as a general rule, where he acts in good faith and 
according to what his best judgment dictates as the wisest course 
to pursue, no Hability attaches if loss should ensue.'''' 

§ 2865. Duty of attorney to account and pay over." — It is 

the duty of an attorney who has collected money or received other 
property belonging to his client to turn the same over to him with- 
out undue delay. While it is true that the attorney will, generally, 
not be liable to an action for money thus collected until after there 
has been a demand upon him and he has refused to pay,''* yet if he 
fails to use due care in preserving the money or property — as by 
placing the funds in an insolvent bank, or the like, — the resulting 
loss will be the attorney's and not that of the client.'" There may 

"Cox V. Livingston, 2 Watts & "As to the duty of keeping an 

S (Pa) 103, 37 Am. Dec. 486; Read account, see Brigham v. Newton, 106 

V.' Patterson, 11 Lea (Tenn.) 430. La. 280, 30 So. 849. 

'"Nave V. Baird, 12 Ind. 318. " Pierse v. Thornton, 44 Ind. 235; 

"Cox V. Livingston, 2 Watts & Claypool v. Gish, 108 Ind. 424, 9 N. 

S. (Pa.) 103, 37 Am. Dec. 486. E. 382; Beardslee v. Boyd, il Mo. 

"Pennington's Exrs. v. Yell, 11 180; People v. Brotherson, 36 Barb. 

Ark. 212, 52 Am. Dec. 362; Bennett (N. Y.) 662. 

v. Phillips, 57 Iowa 174. 10 N. W. ™ Grayson v. Wilkinson, 5 Sm. & 

328; Webb v. White, 18 Tex. 572; M. (Miss.) 268. But comoare HiUe- 

Morrill v. Graham, 27 Tex. 646; gass v. Bender, 78 Ind. 225. 
note in 52 L. R. A. 883. 



§ 2866 AGENCY. 



44 



be circumstances under which the necessity for a demand will be 
dispensed with, as where the attorney has failed within a reason- 
able time to give notice of the collection to the client, or where he 
has shown a disposition to withhold the money.^^ He should use 
due care and diligence in making remittances, as forwarding by 
unauthorized or unusual modes is at the risk of the attorney ;^^ 
but he is safe in remitting by the mode directed by his client.*^ 
The client may treat the attorney's failure to remit as a conver- 
sion and sue in trover,** or he may sue ex contractu, in assump- 
gj^_s4a 'p|-|g jnoney in the hands of an attorney which has been col- 
lected for the client is a trust fund, and must usually be kept as 
such, separate and apart from the funds of the attorney. The stat- 
ute of limitations does not ordinarily begin to run in such case un- 
til after demand and refusal, or acts equivalent thereto.*® But if 
the attorney denies his liability and sets up a cross-demand ex- 
ceeding the amount of the funds in his hands this would consti- 
tute a waiver of the demand.** It is held that where an attorney 
fails to notify his client of the collection, suit may be maintained 
by the latter without a previous demand.*^ 

§ 2866. Compensation of attorney. — In the United States 
it is now generally held that attorneys stand upon the same foot- 
ing as other persons who render services, and may, consequently, 
recover their fees on contracts, express or implied, the same as 
other agents.** In states in which a license is required to practice 

"^ Weeks Attys. at Law (2d ed.), 458; Hollenbeck v. Stanberry, 38 

§§ 308, 309. Iowa 32S; Voss v. Backop, 5 Kans. 

^^ Grayson v. Wilkinson, S Sm. & 59; Glenn v. Cuttle, 2 Grant (Pa.) 

M. (Miss.) 268. 273. 

""See Kimraell v. Bittner, 62 Pa. ""Calvert v. Coxe, 1 Gill (Wd.) 

St. 203. 95 ; Blair v. Columbian Fireproofing 

"* Houston V, Frazier, 8 Ala. 81. Co., 191 Mass. 333, 77 N. E. 762; 

"a Black V. Riley (Cal. App.), 128 Brackett v. Sears, IS Mich. 244; De- 

Pac. 764. troit v. Whittemore, 27 Mich. 281; 

"'Roberts v. Armstrong's Admr., 1 Wilson v. Burr, 25 Wend. (N. Y.) 

Bush (Ky.) 263, 89 Am. Dec. 624; 386; Fischer-Hansen v. Brooklyn &c. 

Cord V. Taylor, S Ky. L. (abstract) R. Co., 173 N. Y. 492, 66 N. E. 

852; Sneed v. Hanly, Hemp. (U. S.) 395; Ingersoll v. Coal Creek Coal 

659, Fed. Cas. No. 13136. Co., 117 Tenn. 263, 98 S W 178 

""Walradt v. Maynard, 3 Barb. (N. 119 Am. St. 1003. But see Bentley 

Y.) 584; Krause v. Dorrance, 10 v. Fidelity &c. Co., 75 \ J L 828 

Pa. St. 462, 51 Am. Dec. 496. 69 Atl. 202, 127 Am. St. 837, in the 

" Jett V. Hempstead, 25 Ark. 462 ; note to which, however, it is shown 

Denton v. Embury, 10 Ark. 228. See that the almost universal rule in 

also. Shepherd v. Crawford, 71 Ga. this country is as stated in the text. 



45 ATTORNEYS AT LAW. § 2866 

law, an attorney cannot usually recover for services until he has 
taken out such license.*" Compensation may, of course, be fixed 
by express contract, or if not thus fixed the attorney may recover, 
in a proper case, the value of the services upon a quantum 
meruit."" Where an agreement is for a stipulated fee, but the 
attorney is discharged without fault of his own, he is entitled at 
least to payment for the services rendered, if not to the whole 
fee." But if the attorney has abandoned his client's cause 
without just ground he cannot recover for services rendered."" 
In such a case the contract for the stipulated amount of the fee 
may be treated as rescinded by the client, and the attorney can 
recover nothing, or at most only as much as the services were 
reasonably worth under the circumstances, on the basis of a 
quantum meruit, and ordinarily there could be no recovery at 
all."^ In case of the death, insanity or other disability of such at- 
torney before the termination of the employment, his representa- 
tive may usually recover what the attorney has earned."* As 
a general rule, in the absence of a specific agreement to the con- 
trary, an attorney who is retained in a suit must serve to the end 
before his right to compensation attaches, the contract being re- 
garded as entire ;"^ but where he withdraws for a justifiable cause 
he can recover proportionately, at least."" An attorney may also 
recover from a client, in a proper case, indemnity and the reason- 
able expenses to which he has been put by reason of the litigation, 
the same as other agents."^ An attorney cannot recover fees for 

no matter whether the lawyer is at- client may discharge where there is 

torney, barrister or counsellor un- a contingent fee, Louque v. Dejan, 

der the English classification. 129 La. Ann. 519, 56 So. 427, 38 L. 

"Hittson V. Browne, 3 Colo. 304; R. A. (N. S.) 389, and note with ref- 

Tedrick v. Hiner, 61 111. 189. See erence to other notes m the same 

also, Taylor v. Crowland &c. Coke series. 

Co., 10 Exch. 293; note in 12 L. R. °= Morgan v. Roberts, 38 111. 65. 

A. (N. S.) 613. But compare West- °* Callahan v. Shotwell, 60 Mo. 398. 

cott V. Baker (N. J.), 85 Atl. 315. "'Nichols v. Scott, 12 Vt. 47. See 

"Weeks Attys. at Law (2d ed.), Sessions v. Palmeter, 75 Hun (N. 

§ 334. ^ Y.) 268, 58 N. Y. St. 289, 26 N. Y. 

"French v. Cunningham, 149 Ind. S. 1076. 

632, 49 N. E. 797; Myers v. Crock- °° Powers v. Manning, 154 Mass. 

ett, 14 Tex. 257. See also, Schein- 370, 28 N. E. 290, 13 L. R. A. 258; 

esohn v. Lemonek, 54 Ohio St. 424, Tenney v. Berger, 93 N. Y. 524, 45 

95 N. E. 913, Ann. Cas. 1912C. W, Am. Rep. 263. 

and note. "Helps v. Clayton, 17 C. B. (N. 

"Holmes v. Evans, 129 N. Y. 140, S.) 553; Vilas v. Bundy, 106 Wis. 

29 N. E. 233. And see as to when 168, 81 Mo. 812. 



§ 2866 AGENCY. 46 

an undertaking which was immoral, illegal, or contrai-y to pub- 
lic policy ;"* but, although there may be some illegal provision in 
the contract, this may not always prevent a recovery for services 
legally performed. Some decisions make a distinction between 
cases where the contract is to do an unlawful act or for an unlaw- 
ful purpose, and cases in which there is no such purpose and the 
services are not intrinsically illegal."' Attorneys' fees are often 
provided for in notes, mortgages, and the like. It is generally 
held that where a mortgage provides for the payment of reason- 
able attorneys' fees by the mortgagor to the mortgagee, in case of 
foreclosure, such provision is valid and may be enforced in the 
absence of prohibitory statutes;^ but this question, and especially 
as to whether such a stipulation may be enforced when contained 
in a note, is a question as to which the authorities are not entirely 
harmonious, although the weight of authority is in favor of the 
validity of such contracts.^ When the compensation of an attor- 
ney is to be valued by quantum meruit, it is customary and proper 
to prove the value of such services by other attorneys at law, who, 
as professional experts, are acquainted with the value of such 

" See Treat v. Jones, 28 Conn. 334 ; See also, Farmers' Nat. Bank v. Mc- 

Barngrover v. Pettigrew, 128 Iowa Call, 25 Okla. 600, 106 Pac. 866, 26 

S33, 104 N. W. 904, 2 L. R. A. (N. S.) L. R. A. (N. S.) 217, and note. 

260, 111 Am. St. 206; Gammons v. ^Barton v. Farmers' &c. Bank, 122 

Johnson, 76 Minn. 76, 78 N, W. 1035 ; 111. 352, 13 N. E. 503 ; Dorsey v. 

Butler V. Legro, 62 N. H. 350, 13 Am. Wolff, 142 111. 589, 32 N. E. 495, 18 

St. 573. Nor, it seems, for services L. R. A. 428, 34 Am. St. 99; Billings- 

that are absolutely useless. Hill v. ley v. Dean, 11 Ind. 331; Smith v. 

Featherstonhaugh, 7 Bing. 569, 20 E. Silvers, 32 Ind. 321 ; Stoneman v. 

C. L. 255; Still V. Thomas, 8 Car. & Pyle, 35 Ind. 103, 9 Am. Rep. 637; 

P. 762, 34 E. C. L. 762 ; Hill v. Sperry v. Horr, 32 Iowa 184 ; Wilson 

Allen, 2 M. & W. 283, all of which Sewing Mach. Co. v. Moreno, 6 

are cited and distinguished in French Sawy. (U. S.) 35, 4 Fed. 806. See 

V. Cunningham, 149 Ind. 632, 49 N. also, Hamilton v. Fowler, 99 Fed. 

E. 797. See note to Baringrove v. 18, 40 C. C. A. 47; Hunter v. Clark, 

Pettigrew, 2 L. R. A. (N. S.) 260. 184 111. 158, 56 N. E. 297, 75 Am. St. 

°° Also, Davis v. Webber, 66 Ark. 160. On the other hand, it has been 

190, 49 S. W. 822, 43 L. R. A. 196, decided that such a stipulation in 

74 Am. St. 81 ; Husband v. Cook, a note is against public policy, usuri- 

24 Ky. L. 1320, 71 S. W. 509; Potter ous and invalid. Witherspoon v. 

V. Ajax Min. Co., 22 Utah 273, 61 Mussellman, 14 Bush. (Ky.) 214, 29 

Pac. 999. See also, Matter of Sny- Am. Rep. 404. To same effect, 

der, 190 N. Y. 66, 82 N. E. 742, 123 Boozer v. Anderson, 42 Ark. 167; 

Am. St. 533. Meyer v. Webber. 133 Cal. 681, 65 

^Smiley V. Meir, 47 Ind. SS9; Wal- Pac. 1110; Cornish v. Woolverton, 

ter v. Dickson, 175 Pa. St. 204, 34 32 Mont. 456, 81 Pac. 4, 108 Am. St. 

Atl, 646; Hermes v. Vaughn, 3 Tex. 598. There are statutory provisions 

Civ. App. 607, 22 S. W. 189, 817; in some states regulating contracts 

Tallman v. Truesdell, 3 Wis. 443. of this character. See also, notes in 



47 ATTORNEYS AT LAW. § 2867 

services.* But it is held that, if such services were rendered 
under the eye of the court, the amount may be fixed by the 
court without hearing testimony,* and that the court has a right to 
judge of the reasonableness of an attorney's charges without ref- 
erence to the opinions of witnesses." In estimating the value of 
the services, it is proper for the plaintiff to prove his ability as a 
lawyer, in order to show the value of the services." It is also 
proper to consider the amount that was recovered in the litigation 
as a result of the attorney's services.^ The amount in contro- 
versy, the ability of the party to pay, and the result of the effort, 
are proper circumstances to consider in fixing the compensation 
of an attorney in a case,^ and there are various other matters that 
may sometimes be considered." 

§ 2867. Attorney's lien. — An attorney has a common-law 
lien on the property and papers of his client in the hands of such 
attorney, for his fees and proper costs and disbursements. There 
are two kinds of common-law liens, namely, a general or retain- 
ing lien and a particular or special lien.^° An attorney has a gen- 
eral lien upon the property and effects of his client, in his hands, 
for any balance due for any services as such attorney ;" and he 
has a particular lien on any article of property or money for 
"labor bestowed or money expended in regard to that particular 

35 L. R. A. 536; 26 L. R. A. (N. S.) and note. See also, note in 22 L. 

217; 1 L. R. A. 546, 3 L. R. A. 51. R. A. (N. S.) 776. The subject of 

^ Knight V. Russ, 11 Cal. 410, 19 the illegality of contracts because of 

Pac. 698; Blizzard v. Applegate, 61 champerty or maintenance has else- 

Ind. 368; Stow v. Hamlin, 11 How. where been considered. Vol. I, ch. 

Pr. (N. Y.) 452; Vilas v. Downer, 21 21, §§ 122-127. But see further as to 

Vt. 419. the right of an attorney to recover 

*Dorsey v. Creditors, 5 Mart. (N. compensation in such cases on the 

S.) (La.) 399; Baldwin's Exr. v. quantum meruit, note in 2 L. R. A. 

Carleton, IS La. 394. (N. S.) 261. See also, as to contin- 

° Gaylord's Trustees v. Nelson, 7 gent or percentage fees, the notes in 

Ky. L. (abstract) 821. 15 L. R. A. (N, S.) 729; 27 L. R. A. 

» Lungerhausen v. Crittenden, 103 (N. S.) 634, 125 Am. St. 694; 14 L. 

Mich. 173, 61 N. W. 270. See also, R. A. (N. S.) 1101. 

Stoddard v. Sagal (Conn.), 85 Atl. "See Story Agency (9th ed.), § 

519. ■ 354; 19 Am. & Eng. Ency. Law (2d 

'Berry v. Davis, 34 Iowa 594. See ed.). Tit. "Liens." Such special lien 

also. Council v. Hixon (Ga. App.), is also called a charging lien, and is 

76 S. E. 603. sometimes referred to as an equi- 

' Lombard v. Bayard, 1 Wall. Jr. table lien. See note to Hanna v. 

(U, S.) 196, Fed. Cas. No. 8469, affd. Island Coal Co., 51 Am. St. 246. 

9 How. (U. S.) 530, 13 L. ed. 245. "McDonald v. Charleston &c. R. 

• Mellon v. Fulton, 22 Okla. 636, Co., 93 Tenn. 281, 24 S. W. 252. See 

98 Pac. 911, 19 L. R. A. (N. S.) 960 also, Frimwell v. King, IS Sim. 191; 



§ 286/ AGENCY. 48 

property."" The particular or special lien of an attorney attaches 
to the fruits of a judgment or decree procured by the services of 
the attorney. It is limited to the property or thing as to which 
or in connection with which the services have been performed," 
and in this respect it differs from the general lien, which attaches 
to all such articles generally on account of any balance due the 
attorney for professional services.'* An attorney has an equitable 
or special lien on the judgment obtained by him for his client, 
but it only extends to such services as were performed in the 
particular suit." Where an attorney received from an agency 
a claim for collection, it was held he could not retain from the 
proceeds thereof the amount of a debt owing to him for other 
services rendered such agency.'" But where an attorney ob- 
tained a money judgment for his client, for damages caused by 
the wrongful issuing of an injunction, such attorney having re- 
sisted the injunction proceedings and rendered other services in 
connection with the establishment of his client's right, resulting 
in such judgment for damages, it was held that the attorney's lien 
on the judgment covered his fees in all the suits concerning the 
same matter, all being considered as parts of a single litigation, 
although technically there were several suits.'' As a general 
rule, however, the lien on the judgment extends only to fees in 
that particular case, although there may have been other suits 
intimately connected therewith.'* But it has been held that an 
attorney also has an equitable lien on the distributive share of an 

Bowling Green Sav. Bank v. Todd, Mach. Co. v. Boutelle, 56 Vt. 570, 

52 N. Y. 489; Scott v. Darling, 66 48 Am. Rep. 821. 

Vt. 510, 29 Atl. 993. "' Mc Williams v. Jenkins, 72 Ala. 

"Weeks Attvs. at Law (2d ed.), 480; Mansfield v. Dorland, 2 Cal. 

§ 369; Story Ag. (9th ed.), § 383. 507; Adams v. Fox, 40 Barb. (N. Y.) 

See Finance Co. v. Charleston &c. 442, 27 How. Pr. (N. Y.) 409, revd. 

R. Co., 52 Fed. 526. 40 N. Y. 577. In many jurisdictions 

" In re Wilson, 12 Fed. 235, 2 it is limited to taxable costs. See 

Civ. Proc. 343, 2 McCarty Civ. Proc. note in 51 Am. St. 259, 260. 

(N. Y.) 151; Sanders v. Seelye, 128 "McMath v. Mann Bros. &c. Shoe 

111. 631, 21 N. E. 601; Butchers' Co., 12 Ky. L. 952, 15 S. W. 879. 

Union &c. Co. v. Crescent City &c. " Butchers' Union &c. Co. v. Cres- 

Live Stock &c. Co., 41 La. Ann, 355, cent City &c. Stock Co., 41 La. Ann. 

6 So. 508. 355, 6 So. 508. 

"In re H., 87 N. Y. 521, 63 How. "'Massachusetts &c. Const. Co v 

Pr. (N. Y.) 152; Ward v. Craig, 87 Gill's Creek Tp., 48 Fed. 145; Phil- 

N. Y. 550. See also, Weid Sewing lips v. Stagg, 2 Edw. Ch. (N. Y ) 

108. 



49 ATTORNEYS AT LAW. § 2867 

heir, for services rendered the estate." A prosecuting attorney, 
however, has no lien on a judgment against a defaulting officer 
for money due the public, for public funds cannot be taken to sat- 
isfy the debts of individuals.^" The English practice of taxing 
attorney's fees as costs once obtained, and seems to still obtain 
in some of the American states.^^ Where this is the rule, the 
attorney's lien extends only to fees and disbursements taxable 
as costs." But this practice has been abandoned in nearly all 
the states, and the matter of liens for fees is regulated largely 
by statutes." A general lien cannot be enforced by legal pro- 
ceedings ; it is a sort of passive lien, which depends wholly on pos- 
session, and in this respect merely gives the attorney the right to 
retain the papers or property until his bill is paid.^* As already 
stated, in such cases possession is indispensable, and hence, when- 
ever it is parted with, the lien ceases.^^ Special liens on judgments, 
however, may usually be enforced by equitable proceedings, or, if 
governed by statute, according to the method pointed out by the 
statute.- It has been held that an attorney's lien on a judgment 
amounts to an equitable assignment,^" and may be enforced by 

"Koons V. Beach. 147 Ind. 137, Civ. Proc. 343, 2 McCarty Civ. Proc. 

45 N. E. 601, 46 N. E. 587. And one (N. Y.) 151; Brown v. Bigley, 3 

employed in a contest over the ap- Tenn. Ch. 618 ; McDonald v. Railroad, 

pointment of a guardian is held to 93 Tenn. 281, 24 S. W. 252. See also, 

have an equitable lien or claim as to the rule in the federal courts, 

against the funds of the estate which McPherson v. Cox, 96 U. S. 404, 24 

he succeeded in securing and pre- L. ed. 746. 

serving. In re Deck's Guardianship '"Dicas v. Stockley, 7 Car. & P. 

(Iowa), 139 N. W. 550. 587; note to Andrew v. Morse, 31 

""Wood v. State, 125 Ind. 219, 25 Am. Dec. 759; Nichols v. Pool, 89 

N. E. 190. 111. 491 ; Eddinger v. Adams, 4 Kulp 

='See Mansfield v. Dorland, 2 Cal. (Pa.) 401; Dubois' Appeal, 38 Pa. 

507; pcean Ins. Co. v. Rider, 22 St. 231, 80 Am. Dec. 478. If he ac- 

Pick. (Mass.) 210; Wright v. Cob- cepts other security the Hen is waived 

leigh, 21 N. H. 339; Rooney v. Sec- thereby. See note in 31 Am, Dec. 

ond Ave. R. Co., 18 N. Y. 368; note 759; Cowell v. Simpson, 16 Ves. 

in 51 Am. St. 259. Jr. 275. See also, note in 51 Am. St. 

" Massachusetts &c. Const. Co. v. 271. 
Gill's Creek Tp., 48 Fed. 145 ; For- "= Andrews v., Morse, 12 Conn. 444, 

sythe v. Beveridge, 52 111. 268, 4 Am. 31 Am. Dec. 752; In re Wilson, 12 

Rep. 612; Miller v. Newell, 20 S. Fed. 235, 2 Civ. Proc. 343, 2 Mc- 

Car. 123, 47 Am. Rep. 833. Carty Civ. Proc. (N. Y.) 151 ; Koons 

""See Reinhard Agency, 426; War- v. Beach, 147 Ind. 137, 45 N. E. 601, 

field v. Campbell, 38 Ala. 527, 82 Am. 46 N. E. 587 ; Weeks v. Wayne Cir- 

Dec 724; note in 51 Am. St. 260. cuit Judges, 73 Mich. 256, 41 N. W. 

^Bozon v. BoUand, 4 Mylne & C. 269; Marshall v. Meech, 51 N. Y. 

354; In re Wilson, 12 Fed. 235, 2 140, 10 Am. Rep. 572. 

4 — Contracts, Vol. 4 



§ 2868 AGENCY. 50 

petition and reference.^'' The usual mode, however, at least in 
some jurisdictions, is by execution for the amount of the Hen,^' 
issued in the name of the cHent.^" An attorney, unless otherwise 
provided by statute, has no lien on land which may have been re- 
covered in an action in which he has been retained.^" Attorney's 
liens on judgments and the like, are now largely regulated by 
statutes in this country.^'- 

§ 2868. Attorneys in fact — Power of attorney. — An attor- 
ney in fact,''^ in the broadest sense of the term, may include any 
agent employed to act in the place or stead of another; but the 
term is generally employed as meaning one who is authorized by 
his principal for some particular purpose or to do some particular 
act. His authority is usually conferred by a sealed instrument 
called a "power" or "letter of attorney." A power of attorney^^ 
is, therefore, an instrument by which the authority of an attorney 
in fact is set forth. It is general where the authority is to act 
generally in the premises, and special when limited to a particular 
act or acts. No particular or set form of words or expression 
is required. It must be executed as required by law, and with 
the necessary formalities so required.^* It is usually construed 

"Brown V. New York, 11 Hun (N. 128 Am. St. 360; Boogren v. St. 

Y ) 21 Paul City R. Co., 97 Minn. 51, 106 

"■Ackerman v. Ackerman, 11 Abb. N. W. 104, 3 L. R. A. (N. S.) 379, 

Pr. (N. Y.) 256, revd., 14 Abb. Pr. and note, 114 Am. St. 691. 

(N. Y.) 229. "^By attorney in fact is meant a 

^ See Albert Palmer Co. v. Van person acting under a special power 

Orden 64 How. Pr. (N. Y.) 79, created by deed. Porter v. Hernman, 

modified 4 Civ. Proc. 44, 49 N. Y. 8 Cal. 619. See also, Treat v. Tol- 

Super. Ct. 89. man, 113 Fed. 892 (distinguishing it 

'" Smalley v. Clark, 22 Vt. 598. from a warrant of attorney) ; Hall 

'^Fowler v. Lewis' Admr., 36 W. v. Sawyer, 47 Barb. (N. Y.) 116. 

Va. 112, 14 S. E. 447. But see Smith "2 Bouv. Law. Diet. (Rawle's Re- 

V. Young, 62 111. 210; Hunt v. Mc- vision) 713, 2 Abb. Law. Diet. 297. 

Clanahan, 1 Heisk. (Tenn.) 503. See See also, Berkeley v. Hardy, 5 B. & 

note in 51 Am. St. 274-281, for C. 355, 11 _E. C. L. 495; Cutler v. 

various decisions as to when such Haven, 8 Pick. (Mass.) 490. 

liens exist, how they may be ob- "Denning v. Vanduren, 47 Ind. 

tained, their effect, and the manner 423, 17 Am. Rep. 709; Hunger v. 

of enforcing them under such stat- Baldridge, 41 Kans. 236, 21 Pac. 159, 

utes, including, also, a review of the 13 Am. St. 273 ; Cutler v. Haven, 8 

cases as to priority of attorneys' Pick. (Mass.) 490; Gage v. Gage, 

liens, when subject to set-off, and the 30 N. H. 420; Williams v. Conger, 

like. See also, Hubbard v. Elli- 125 U. S. 397, 31 L. ed. 778, 8 Sup. 

thorpe, 135 Iowa 259. 112 N. W. Ct. 933. But see as to act thereunder 

796, 124 Am. St. 271 ; Harlan v. Ben- not necessarily being void, Natoon v. 

nett, 127 Ky. 572, 106 S. W. 287, Sherman, 84 111. 263. 



51 ATTORNEYS AT LAW. § 2868 

somewhat strictly,'^ but the intention of the parties will ordinar- 
ily be given efifect so as to accomplish the object.'" The general 
principles applied in other cases of agency obtain, and particular 
consideration of them in this connection is unnecessary," 

""See Story Agency (9th ed.), §§ less, 59 Md. 56; Holladay v. Daily, 

21, 68, note to Thiel Detective Assn. 19 Wall. (U. S.) 606, 22 L. ed. 187. 

V. McClure, 4 L. R. A. (N. S.) 843; See also, Castle v. Bell, 145 Ind. 

Brantley v. Southern Life Ins. Co., 8, 44 N. K. 2; Ludwig v. Cory, 158 

53 Ala. 554 ; Cutler v. Haven, 8 Pick. Ind. 582, 64 N. E. 14. 

(Mass.) 490; Craighead v. Peterson, '"As to necessity of notice of 

72 N. Y. 279, 28 Am. Rep. 150. Com- revocation, see Theis v. Durr, 125 

pare, also, Trogdon v. Williams, 144 Wis. 651, 104 N. W. 985, 1 L. R. 

N. Car. 192, 56 S. E. 865, 10 L. R. A. (N. S.) 571, and note, 110 Am. 

A. (N. S.) 867. There is no im- St. 880. As to effect of provision 

plied authority to deal with and declaring it shall not be revoked by 

make conveyances to himself. In death, see Weaver v. Richards, 144 

re Acken, 144 Iowa 519, 123 N. W. Mich. 395, 108 N. W. 382, 6 L. R. 

187, Ann. Cas. 1912A. 1166, and note. A. (N. S.) 855 (revoked anyway). 

See also, Piatt v. Frances (Mo.), 152 See also, Mills v. Smith, 193 Mass. 11, 

S. W. 332. 78 N. E. 765, 6 L. R. A. (N. S.) 

^Hemstreet v. Burdick, 90 111. 444; 865 (general rule is that it is re- 
Commonwealth v. Hawkins, 83 Ky. voked by death when not coupled 
246, 7 Ky. L. 238; Posner v. Bay- with an interest). 



CHAPTER LXI. 



AUCTIONEERS. 



1 2870. Auctioneers — Definition and 
description. 

2871. Auctioneer's authority. 

2872. Statute of frauds — Mem- 

orandum. 

2873. Conduct of auction sale. 

2874. Conduct of sale — Chilling 

bids — Puffing and by-bid- 
ding. 

2875. When contract is made — Ac- 

ceptance of bid. 

2876. Nature of contract — Separate- 

ly accepted bids. 



§2877. Rights, liabilities, and rem- 
edies of buyer and seller. 

2878. Auctioneer's duties and 

liabilities to the vendor. 

2879. Auctioneer's duties and 

liabiliti'es to purchaser. 

2880. Liabilities of auctioneer to 

third persons — Sale of 
stolen goods. 

2881. Auctioneer's compensation. 

2882. Auctioneer's lien. 



§ 2870. Auctioneers — Definition and description. — An auc- 
tioneer has been defined as a person who sells at auction ;^ as 
generally understood he is an agent who, for a commission or 
recompense, sells goods or other property at auction." He is, 
primarily, the agent of the owner of the property which he is 
employed by the owner to sell, but from the fall of the hammer, 
when the property is knocked down to the highest bidder, he is 
agent for both purchaser and seller at a public sale.^ An auction, 
in the widest sense of the term, is said to be a sale, however con- 
ducted, by which a person obliges himself to transfer property to 
the highest bidder within the conditions of the sale ; it ordinarily 
denotes such a sale conducted in the usual manner.* The sale is 



'Russell V. Miner, 61 Barb. (N. 
Y.) 534, 5 Lans. (N. Y.) 537. See 
also, Goshen v. Kern, 63 Ind. 468, 30 
Am. Rep. 234. 

'3 Am. & Eng. Ency. L. (2d ed.) 
489; Story Ag. (9th ed.), § 27; 
Thomas v. Kerr, 3 Bush (Ky.) 619, 
96 Am. Dec. 262. 

= Evans Pr. & Ag. (2d ed.), 27, 
143. See also, notes to Anderson v. 
Wisconsin Cent. R. Co., 131 Am. St. 
462, 480, and Thomas v. Kerr, 96 
Am. Dec. 262, 270. Compare Ken- 



nell V. Boyer, 144 Iowa 303, 122 N. 
W. 941, Ann. Cas. 1912A, 1127. 
This is one of the peculiarities of 
the relation, as, in accordance with 
the general rule elsewhere laid down, 
an agent cannot act for two prin- 
cipals having antagonistic interests 
in the matter, 

*Bateman Auctions (1st Am. 
ed.) 1. Compare Pike v. Land 
Comrs., 19 Idaho 268, 113 Pac. 447, 
Ann. Cas. 1912B. 1344. 



52 



S3 AUCTIONEERS. § 2871 

usually conducted competitively, by public outcry, to the highest 
bidder. Hence an auction is defined as a pubHc competitive sale^ 
or a public sale to the highest bidder." An auctioneer differs 
from a broker in some particulars : A broker can both buy and 
sell, while an auctioneer can only sell ; a broker cannot sell at auc- 
tion, as that is not his function, but that of the auctioneer. An 
auctioneer cannot sell at private sale, but a broker may.' In the 
absence of a statute to the contrary, any person may be an auc- 
tioneer. But a state, in the exercise of its police power, may re- 
quire a license tax of auctioneers, and may also authorize munici- 
pal corporations to require such tax, as is often done.^ 

§ 2871. Auctioneers authority. — The autnority of an auc- 
tioneer from the vendor may be conferred, as in the case of any 
other agency, by formal power of attorney, sealed or unsealed, 
by word of mouth, or by implication," and it is now pretty well 
settled that such authority even to sell land may be given verb- 
ally.^" His authority may be dissolved or taken away by the rev- 
ocation of either party at any time before the fall of the ham- 
mer ;^^ and it terminates by accomplishment of the purpose when 
the sale has been completed and the purchase-price paid.^- The 
agency from the purchaser cannot, perhaps, be said to arise or 
be inferred from the official position of the auctioneer, but is gen- 
erally shown by the acts and conduct of the purchaser or bidder 
at the auction, such as standing by and bidding, either by means 
of words or by making signs or responding to signs given by 
the auctioneer.^^ 

'Crandall v. State. 28 Ohio St. La. Ann. 610, 48 So. 124; Muffatt v. 

479 Gott, 74 Mich. 672, 42 N. W. 149. 

"Russell V. Miner, 61 Barb. (N. Y.) "Bateman Auctions (1st Am. ed.) 

534, 5 Lans. (N. Y.) 537. 30. 

'Story Agency (9th ed.), § 27. "Reinhard Agency, § 426a. See 

*3 Am & Eng. Ency. of Law (2d also, Craig v. Godfroy, 1 Cal. 415, 54 

ed ") 489 ■ note to Hager v. Walker, Am. Dec. 299 ; McKiernan v. Valleau, 

128 Ky 1, 107 S. W 254, 129 Am. 23 R. I. 501, 51 Atl. 102. 

St 238 280, where the cases are col- "Mews v. Carr, 1 H. & N. 484; 

lected Bartlett v. Purnell, 4 A. & E. 792; 

'Bateman Auctions (1st Am. ed.) Hart v. Woods, 7 Blackf. (Ind.) 568; 

20-23 O'Donnell v. Leeman, 43 Maine 158, 

"Doty V Wilder, 15 111. 407, 60 69 Am. Dec. 54; Johnson v. Buck, 

Am. Dec. 756; Yourt v. Hopkins, 24 35 N. J. L. 338, 10 Am. Rep. 243; 

III. 326. But statutes in some juris- Smith v. Jones, 7 Leigh (Va.) 165, 

dictions require authority to be given 30 Am. Dec. 498. 
in writing. Reinach v. Jung, 1*22 



2872 AGENCY. 



54 



§ 2872. Statute of frauds — Memorandum. — The seven- 
teenth section of the English statute of frauds provides that "no 
contract for the sale of any goods, wares and merchandise, for 
the price of ten pounds sterling or upward, shall be allowed to be 
good, except the buyer shall accept part of the goods so sold, and 
actually receive the. same, or give something in earnest to bind 
the bargain, or in part of payment, or that some note or memo- 
randum in writing of the said bargain be made and signed by the 
parties to be charged by such contract, or their agents thereunto 
lawfully authorized."" By what is commonly known as "Lord 
Tenterden's Act,"^^ it was further provided, among other things, 
that the provisions of the seventeenth section "shall extend to all 
contracts for the sale of goods of the value of ten pounds sterling 
and upward, notwithstanding the goods may be intended to be 
delivered at some future time, or may not at the time of such con- 
tract be actually made, procured, or provided," etc. ; and it is held 
that the effect of this supplementary statute is to substitute the 
word "value" for the word "price" in the seventeenth section.^" 
The English statute of frauds has been generally adopted by the 
American states; but some of them fix different sums as the 
amount necessary to bring a contract within its purview. Auction 
sales are included as within the statute.^^ This applies to sales of 
land as well as personal property.^^ An auctioneer cannot act as 
such at the sale of his own property and bind the purchaser by 
a memorandum without express authority; in that case, 
he would be acting as agent for a party to a contract to which he 
himself was the adverse party.^® So, it is held that if the seller 

" 29 Charles II, ch. 3, § 17. Ves. Jr. 456 ; People v. White, 6 Cal. 

"°9 Geo. IV, ch. 14, § 7. 75; Ruckle v. Barbour, 48 Ind. 274; 

" Scott V. Eastern Counties R. Co., Gill v. Hewitt, 7 Bush (Ky.) 10; 

12 M. Sr W. 33 ; Harman v. Reeve, 18 Episcopal Church v. Wiley, 2 Hill 

C. B. 587, 25 L. J. C. P. 257. Eq. (S. Car.) 584, Riley Eq. 156, 30 

"Hinde v. Whitehouse, 7 East 558; Am. Dec. 386. 
Kenworthy v. Schoiield, 2 B. & C. "In Bent v. Cobb, 9 Gray (Mass.) 
945; 2 Kent Com. 540; People v. 397, 69 Am. Dec. 295, per Bigelow, 
White, 6 Cal. 75; Hadden v. John- J., it is said: "The great mischief 
son, 7 Ind. 394; Ruckle v. Barbour, intended to be prevented by the 
48 Ind. 274; Pike v. Balch, 38 Maine statute would still exist, if one party 
302, 61 Am. Dec. 248; Morton v. to a contract could make a mem- 
Dean, 13 Mete. (Mass.) 385; ante, orandum of it which could absolute- 
vol. 2, § 1342. ly bind the other. If such were its 

"Kenworthy v. Schofield, 2 B. & true construction, it would be a 

C. 945; Buckraaster v. Harrop, 13 feeble security against fraud; or 



55 AUCTIONEERS. § 2872 

is present in person, directing and controlling the sale, having 
simply employed a crier to cry the sale and knock the property off 
to the best bidder, the crier is not an auctioneer in the regular 
sense of the term, and has no authority as such to make a binding 
memorandum.^" The fact that the vendor is the owner only 
by virtue of a trust deed or in the capacity of trustee for an- 
other does not change the rule that he cannot be both auctioneer 
and vendor at once; this would make him at the same time the 
vendor, the auctioneer, and the agent of the purchaser, which are 
such incompatible positions that he could not justly discharge 
the duties of all of them in relation to the same subject-matter.^^ 
So, it seems that a guardian, executor or administrator cannot act 
as auctioneer of the property of his cestui que trust and bind the 
purchaser by a memorandum made at the sale, without express 
authority to do so.^^ The rule applies that delegated authority 
cannot be again delegated f^ and where the memorandum is made 
by the auctioneer's clerk, unless the purchaser assents to such act 
of the clerk, he may not be bound by it. But the assent may be 
shown by circumstantial evidence ; and if the memorandum is 
made by such clerk, at the time of the sale, in the presence of the 
purchaser and auctioneer, it is sufficient to satisfy the statute.^* 
The memorandum should contain the names of the parties, the 
articles sold, the price, terms of sale, and promise of the party 
to be charged.^'^ Although auctioneers usually keep a salesbook 

rather it would open a door for its son, having no motive to misstate the 

easy commission. A vendor could bargain, and entitled equally to the 

fasten his own terms on his vendee, confidence of both parties. But this 

If it was a written contract binding reason fails when he is the party to 

on the purchaser, he could not show the contract and the party in interest 

by parol evidence that the terms of also." 

the bargain were incorrectly or im- "Buckmaster v. Harrop, 13 Ves. 

perfectly stated. He could not vary Jr. 456; Adams v. Scales 1 Baxt. 

or alter it by the testimony of those (Tenn.) 2i7, 25 Am. Rep. 772. 

present at the sale. The publicity "^^Tull v. David, 45 Mo. 444, 100 

of a sale by auction would be no safe- Am Dec. 385. 

guardagainstafalse statement of the == See Bent v Cobb, 9 Gray 

terms of sale made in the written (Mass.) 397 69 Am^ Dec. 295; TuU 

memorandum signed by a party act- v David, 45 Mo. 444, 100 Am. Dec. 

ing in the double capacity of auc- 385. ,-, ^ ^ as 

tioneer and vendor. The chief rea- ^Bateman Auctions (1st Am. ed.) 

son in support of the rule, that an 29. 

auctioneer acting solely as such, may /'Doty v. Wilder, 15 111. 407 60 

be the agent of both parties, to bind Am. Dec. 756; Smith v Jones 7 

them by his memorandum, is that he Le^gh (Va.) 165; 30 Am. Dec^ 498 

is supposed to be a disinterested per- »» See McMuUen v. Helberg, 6 L. 



§ 2873 AGENCY. 56 

in which such memoranda are entered,^^ the memorandum need 
not necessarily be kept in one paper or book, but may, if pro- 
perly connected, be contained in two or more such papers, al- 
though parol evidence is not admissible to show the connec- 
tion." The memorandum must be made, to satisfy the statute, 
contemporaneously with the sale; that is, before the proceedings 
end.^* The reason for the rule seems to be that the bidder, 
when the article is knocked down to him, calls on the auctioneer 
or clerk to put his name down as the purchaser ; and when this is 
done in his presence, it is presumed to be done with his consent, 
and there is but little danger of fraud or mistake; whereas, if the 
auctioneer or other person were permitted to make the entry 
afterward, there might be danger of substituting other purchasers 
for the real ones, and upon different terms, thus defeating rights 
already vested and imposing liabilities never contracted. ^° 

§ 2873. Conduct of auction sale. — As already stated, an 
auctioneer cannot, as a general rule, sell his own property at 
auction, and bind the purchaser by the memorandum, at least 
unless notice of the ownership has been publicly given by him 
at the sale.^" It sometimes happens that the vendor is obliged to 
reoffer the property for sale, where the former bidder has failed 
to comply with the conditions or to make good his bid. In the 

R. Ir. Eq. 463; Lewis v. Wells, 50 See also, White v. Dalilquist Mfg. 

Ala. 198; Ridgway v. Ingram, 50 Co., 179 Mass. 427, 60 N. E. 791; 

Ind. 145, 19 Am. Rep. 706; Norris Schmidt v. Quinzel, 55 N. J. Eq. 

V. Blair, 39 Ind, 90, 10 Am. Rep. 135 ; 792, 38 Atl. 665. 

Wilstach V. Hayd, 122 Ind. 574, 23 N, "^ Per Staples, J., in Walker v. 

E. 963; O'Donnell v. Leeraan, 43 Herring, 21 Grat. (Va.) 678, 8 Am. 

Maine 158, 69 Am. Dec. 54; ^Morton Rep. 616. But where a pencil mem- 

V. Dean, 13 Met. (Mass.) 385; Dur- orandum was made at the time, and 

ham V. Hartman, 153 Mo. 625, 55 S. entered in the auctioneer's ' salebook 

W. 233, 77 Am. St. 741 ; Cherry v. as soon as possible thereafter, such 

Long, Phil. (Eq.) (N.' Car.) 466. As entry was regarded as an original 

to what constitutes a sufficient mem- one and sufficient. Episcopal Church 

orandum of the sale of land, see v. Wiley, 2 Hill Eq. (S. Car.) 584, 

McBrayer v. Cohen, 92 Ky. 479, 13 Riley Eq. 156, 30 Am. Dec. 386. See 

Ky. L. 667, 18 S. W. 123. also. Gill v. Bicknell, 2 Cush. (Mass.) 

^"Bateman Auctions (1st Am. ed.) 355; McComb v. Wright, 4 Johns. 

159. See Doty v. Wilder, 15 111. 407, Ch. (N. Y.) 659. 

60 Am. Dec. 756. ™ See also, as to auctioneer bidding 

"Bateman Auctions (1st Am. ed.) for himself, Randall v. Lautenberger 

157; Johnson v. Buck, 35 N. J. L. 16 R. I, 158, 13 Atl. 100; Brock v. 

338, 10 Am. Rep. 243. Rice, 27 Grat. (Va.) 812. 

" Horton v. McCarty, S3 Maine 394. 



57 



AUCTIONEERS. 



§ 2873 



Conduct of such a resale, it sometimes becomes a question whether 
the vendor may become the purchaser of the property. In a late 
New York case" a majority of the court held that, in such a case. 



^Ackerman v. Rubens, 167 N. 
Y. 405, 60 N. E. 750, S3 L. R. A. 
867, 82 Am. St. 728. In the major- 
ity opinion it is said: "While the 
courts below recognized this rule they 
did not apply it, for they held that 
the sale at auction was no sale at all, 
because a man cannot sell to him- 
self. This would be true of an at- 
tempt to make a private sale to 
one's self, but it is not true of a 
sale at public auction, fairly con- 
ducted by a licensed auctioneer, and 
made at a reasonable time and place, 
after adequate opportunity to see the 
property, due advertisement to the 
public and personal notice to the 
vendee, when the real purpose is to 
ascertain the value of the property. 
The law is satisfied with a fair sale, 
made in good faith, according to es- 
tablished business methods, with no 
attempt to take advantage of the 
vendee. * * * The primary object of 
the sale was not to pass title from the 
vendor, but to lessen the loss of the 
vendee. The subject of the sale had 
no market value, and the amount for 
which it could be sold depended 
largely upon taste and fancy. A 
public competitive sale by outcry to 
the highest bidder, duly advertised 
and made upon notice to the vendee, 
is a safer method of measuring the 
damages than a sale by private ne- 
gotiation, which has been held suffi- 
cient. (Van Brocklen v. Smeallie, 140 
N. Y. 70 [35 N. E. 415]). A fair 
public sale, in the absence of other 
evidence, is competent evidence of 
value. The plaintiff did not conduct 
the sale himself, but placed the yacht 
in the hands of a pubhc auctioneer 
for sale without reservation, on ac- 
count of whom it might concern. 
While the auctioneer was his agent 
he could not lawfully control him so 
as to prevent an honest sale. The 
defendant had notice and an oppor- 
tunity to protect himself, yet he 
asked for no postponement, made no 
request, gave no instructions, and 
did not even appear at the sale. If 
the plaintiff's agent had refrained 



from bidding, the property would 
have gone to a' stranger for a less 
3um than it finally brought, and yet, 
in that event, even according to the 
defendant's theory, the sale would 
have been valid. The fact that the 
plaintiff outbid all competitors did 
not render the sale invalid, for he 
had a right to bid, provided he took 
no advantage by trying to prevent 
others from bidding or by disre- 
■garding any reasonable request of 
the defendant, or in any other way. 
* * * The object of the sale was 
to measure the damages caused by 
the default of the defendant, and 
they were diminished instead of be- 
ing increased by the action of the 
plaintiff. We forbear further dis- 
cussion, because the question is no 
longer open in this court, as it was 
involved in a case recently decided 
by us upon careful consideration 
after full discussion by counsel. 
(Moore v. Potter, 155 N. Y. 481 
[50 N. E. 271, 63 Am. St. 692]). In 
that case, as in this, the property was 
sold at auction to a representative 
of the vendor, and the point was dis- 
tinctly made on the argument before 
us that as the vendor was the real 
purchaser, 'the sale was colorable 
only and absolutely without effect 
upon the rights of the parties.' 
While we did not discuss the ques- 
tion in our opinion, it was neces- 
sarily involved, was passed upon in 
consultation and decided. Both upon 
principle and authority we think that 
the amount for which the yacht was 
struck off to the vendor at an auc- 
tion sale fairly conducted, upon no- 
tice to the vendee, with no suspicion 
of fraud or undue advantage, was 
lawful evidence of the value of the 
yacht and presented a case for the 
consideration of the jury." Three 
judges dissented on the ground that 
the vendor could not sell to himself. 
"Selling as agent," said Judge 
Haight, "he cannot sell to himself. 
Selling involves contracting and a 
person cannot contract with himself 
and bind others thjreby. If he 



§' 2874 AGENCY. 58 

if the sale was fairly conducted, and due notice thereof given, 
with an opportunity for inspection of the property, the sale would 
be valid. Auction sales should be open to full competition; and 
bids made in good faith by responsible parties should be accepted, 
as otherwise the auctioneer might subject himself to the imputa- 
tion of fraud, for which he would be liable in damages. But he 
is not compelled to receive a bid from one whom he knows, or in 
good faith believes, to be irresponsible.^^ He may, for that rea- 
son, reject the bids of infants, lunatics, drunkards and others 
under disability. An auctioneer should not become a bidder for 
others, as that would place him in the attitude of acting as agent 
for one whose interest is adverse to that of the seller, and, be- 
sides, would introduce into the transaction circumstances of sus- 
picion which would tend to throw doubts upon its fairness.''^ 

§ 2874. Conduct of sale — Chilling bids — Puffing and by- 
bidding. — It is the duty of the auctioneer to conduct the sale 
in an open manner, with fidelity to the seller and fairness to bid- 
ders. He has no right to employ by-bidders simply to "puff" 
the property without the intention of buying it, and neither, as a 
rule, has the vendor, such an act being a fraud upon every 
genuine bidder, for which he may avoid the sale.^* But by- 
bidding or "puffing" will not always avoid a sale, especially if the 
bid be a fair one and it be not the intention to enhance the price 
unreasonably.'^ At common law, "puffing" would avoid an auc- 

could sell to himself publicly he "'See Randall v. Lantenberger, 16 

could privately, and thus be able to R. I. 158, 13 Atl. 100; Veazie v. 

perpetrate a fraud or an injustice Williams, 8 How. (U. S.) 134, 12 

which might be difficult to detect or L. ed. 1018; Brock v. Rice, 27 Grat. 

prove. (Van Brocklen v. Smeallie, (Va.) 812. But compare Flannery 

140 N. Y. 70, 75 [35 N. E. 415] ; v. Jones, 180 Pa. St. 338, 36 Atl. 856, 

Pollen V. Le Roy, 30 N. Y. 549, 557; 57 Am. St. 648; Scott v. Mann, 36 

Dustan v. McAndrew, 44 N. Y. 78 Tex. 157. 

[72]; Hayden v. Demets, S3 N. Y. "Curtis v. Aspinwall, 114 Mass. 

426; Bain v. Brown, 56 N. Y. 285.) 187, 19 Am. Rep. 332; Springer v. 

* * * In this case the sale was Kleinsorge, 83 Mo. 152; Towle v. 

made by the seller to himself. It was Leavitt, 23 N. H. 360, 55 Am. Dec. 

made through the agency of an auc- 195; Walsh v. Barton, 24 Ohio St. 

tioneer it is true, but the auctioneer 28; Davis v. Petway, 3 Head (Tenn.) 

was his agent and represented him ddl , 75 Am. Dec. 789; Veazie v. Wil- 

in the transaction." Hams, 8 How. (U. S.) 134, 12 L. ed 

== Holder v. Jackson, 11 U. C. C, 1018; Peck v. List, 23 W. Va. 338, 

P. 543; Hobbs v. Beavers, 2 Ind. 48 Am. Rep. 398, note in 131 Am. 

142, 52 Am. Dec. 500 : In re Mur- St. 488. 

dock's Case, 2 Bland (Md.). 461, 20 '"McMillan v. H:arris, 110 Ga 72, 

Am. Dec. 381. ' 35 S. E. 334, 48 L. R. A. 345, 78 Am. 



59 AUCTIONEERS. § 2874 

tion sale, at the option of the bidder, unless notice was given.^' 
Another thing which will make an auction sale voidable is what 
is known as "chilling," or abstaining from bidding, as the result 
of an agreement between two or more persons interested in hav- 
ing the property sell at a low price not to bid against each other, 
and thus to stifle competition.^' But not every combination, under- 
standing, or agreement to abstain from bidding will necessarily 
render the sale voidable ; a number of interested parties may agree 
that one of them shall bid for the benefit of all, and the agreement 
is not illegal unless its purpose be to prevent competition.^* Where- 
an auctioneer discourages bidding so as to be able to secure the 
property himself, at a low value, it is such a fraud as will vitiate 
the sale."" Every sale at auction, unless notice be given to the con- 
trary, means competition; and an agreement to run up the price 
unduly, on the one hand, by means of by-bidding, or to stifle com- 
petition, on the other, is regarded as evidence of a fraud, and may 
avoid the sale at the option of the injured party.^" Fraud, how- 
ever, is a question of fact for the jury ; and whether the intention 
was unduly to "puff" or to stifle competition, so as to amount to 
fraud, must usually be left to them to determine.*^ Of course, 
fraud on the part of the auctioneer, in whatever manner it may 
be accomplished, will render the sale voidable on the part of the 
vendor who is injured thereby.*^ And so, where an auctioneer, 

St. 93 (containing an elaborate re- Ensign, 122 N. Y. 144, 25 N. E. 306, 

view of the English and other cases, 9 L. R. A. 731; Goode v. Hawkins, 

as to what is- such puffing as will 2 Dev. Eq. (N. Car.) 393. See, 

vitiate or render the sale voidable) ; also, Kearney v. Taylor, IS How. 

Latham's Exrs. v. Morrow, 6 B. (U. S.) 494, 14 L. ed. 787. 

Mon. (Ky.) 630; Davis v. Petway, °°Brotherline v. Swires, 48 Pa. 

3 Head (Tenn.) 667, 7S Am. Dec. St. 68. 

789; Reynolds v. Dechauras, 24 Tex. "Darst v. Thomas, 87 111. 222. 

174, 76 Am. Dec. 101. See Smith v. Greenlee, 2 Dev. Eq. 

'"Towle V. Leavitt, 23 N. H. 360, (N. Car.) 126, 18 Am. Dec. 564; 

55 Am. Dec. 195; Hartwell v. Gur- Veazie v. Williams, 8 How. (U. S.) 

ney, 16 R. I. 78, 13 Atl. 113. 134, 12 L. ed. 1018. 

"Hunter v. Pfeiffer, 108 Ind. 197, "Pike v. Balch, 38 Maine 302, 61 

9 N. E. 124 ; Pike v. Balch, 38 Maine Am. Dec. 248 ; Hopkins v. Ensign, 

302, 61 Am. Dec. 248; Phippen v. 122 N. Y. 144, 25 N. E. 306; Coxe 

Stickney, 3 Mete. (Mass.) 384; v. Gibson, 27 Pa. St. 160, 67 Am. 

Fletcher v. Johnson, 139 Mich. 51, Dec. 454; Allen v. Stephanus, 18 

102 N. W. 278, 111 Am. St. 401. Tex. 658. 

=' Jenkins v. Frink, 30 Gal. 586, 89 "Brock v. Rice, 27 Grat. (Va.) 

Am. Dec. 34; Hunt v. Elliott, 80 812; Myers v. Sanders' Heirs, 7 

Ind. 245, 41 Am. Rep. 794; Stoute Dana (Ky.) 506. 
V. Voorhies, 4 La. 392; Hopkins v. 



§ 2875 AGENCY. 60 

who saw a bidder approaching, at once knocked down the prop- 
erty to his brother, on a bid that was far less than the real value 
thereof, in order to prevent competition, it was held that the 
owner of the property could avoid the sale.*^ But a vendor who 
has employed "puffers" cannot himself avoid the sale on that 
account, as that would be taking advantage of his own wrong." 

§ 2875. When contract is made — Acceptance of bid. — It is 
said that three things are necessary to complete an auction sale. 
"There must be a bidder, the property must be 'struck off' or 
'knocked down,' and the person to whom it is struck off must 
complete his purchase by complying with the terms of the sale."*^ 
But the third thing above stated is not essential to make a binding 
contract creating certain rights and liabilities. There is some 
conflict among the authorities, and a few of them, especially the 
English cases, seem to take the view that a binding contract exists 
as soon as a bid is made in compliance with the conditions of the 
offer ;''° but the weight of authority is to the effect that until the 
bid is accepted, which is usually done by the fall of the hammer 
or verbal announcement by the auctioneer, or both, there is no 
complete contract, and either the bidder or the purchaser may 
withdraw his offer.*^ 

§ 2876. Nature of contract — Separately accepted bids. — 
The question has sometimes arisen as to whether the purchase 
of articles at an auction, on different bids, but which are delivered 

"Jackson v. Crafts, 18 Johns. (N. Cent. R. Co., 107 Minn. 296, 120 N. 

Y.) 110. W. 39, 20 L. R. A. (N. S.) 1133, 131 

Small V. Boudinot, 9 N. J. Eq. Am. St. 462, where the authorities 

381 ; Reinhard Agency, § 428. are thoroughly reviewed. Among 

" Sherwood v. Reade, 7 Hill (N. the cases to the same effect are Hi- 

Y.) 431. hernia Sav. &c. Soc. v. Behnke, 121 

"See Warlow v. Harrison, 1 El. Cal. 339, S3 Pac. 812; Dunham v. 

& El. 309, 28 L. J. Q. B. (N. S.) Hartman, 153 Mo. 625, 55 S. W. 233, 

18; McAlpine v. Young, 2 Ch. Cham. 11 Am. St. 741; Fisher v. Seltzer, 

(Ont.) 8S; Miller v. Baynard, 2 23 Pa. St. 308, 62 Am, Dec. 335; 

Houst. (Del.) 559, 83 Am. Dec. 168; Blossom v. Milwaukee &c. R. Co., 3 

Hartwell v. Gurney, 16 R. I. 78, 13 Wall, (U. S.) 196, 18 L. ed, 43; see, 

Atl, 113. But see where there are also, Payne v. Cove, 3 T. R. 148; 

conditions, McManus v. Fortescue Warehime v. Graf, 83 Md. 98, 34 

(1907), 2 K. B, 1, 76 L. J. K. B. 393, Atl, 364; McPherson Bros, Co. v, 

96 L, T. (N, S,) 444. Okanogan County, 45 Wash. 285, 88 

" This is clearly laid down and Pac. 199, 9 L. R. A. (N. S.) 748. 
decided in Anderson v. Wisconsin 



6l AUCTIONEERS. § 2877 

at the same time, constitutes but a single sale, or more than one, 
and this is a question in regard to which the English and Ameri- 
can courts differ. Cases in England hold that the making and ac- 
ceptance of each bid should be regarded as constituting a separate 
contract;** unless, indeed, the several articles purchased are so 
related that one article cannot be used or enjoyed without the 
others, in which case only may the purchasing of the several 
articles constitute but a single contract.*" But in the United 
States it is held that if one person obtains a number of articles 
as the result of separate bids, all the purchases together constitute 
but one sale f and one of the courts has stated the prevailing rule 
in the following words : "When the purchase is made at an 
auction sale of goods, at one and the .same time, and from the 
same vendor, although the articles purchased are numerous, and 
are struck off separately at separate and distinct prices, the whole 
constitutes but one entire contract; and the prices of the different 
articles fixed on are but part and parcel of it."°^ 

§ 2877. Rights, liabilities and remedies of buyer and seller. 

— As a general rule a purchaser of property at auction sale has 
the right to the possession of the same as soon as he has complied 
with the terms of the sale, the title vesting in the bidder at once, 
on being adjudicated to him ;" hence, if property so purchased is 
destroyed by fire, before it is removed by the purchaser, it will be 
at his loss.**^ But the terms and conditions of a sale subject 
thereto must be complied with, and as long as the conditions 
remain unfulfilled, the purchaser has no right to the possession of 
the property; nor does the title ordinarily pass and vest in the 

. "Emmerson v. Heelis, 2 Taunt. Hampton, 2 Watts. & S. (Pa.) 377, 

38; Roots v. Dormer, 4 B. & Ad. 77, 37 Am. Dec. Sll. 

24 E C L 43. °^ Succession of Boudousquie, 9 

"Chambers v. Griffiths, 1 Esp. 150; Rob. (La.) 405; Municipality No. 1 

Gibson V. Spurrier, Peake (1795- v. Cordeviolle, 19 La. 235; Npah v. 

1812) 49. Pierce, 85 Mich. 70, 48 N. W. 277; 

'"' Mills V Hunt, 17 Wend. (N. Jenness v. Wendell, 51 N. H. 63, 12 

Y.) 333, am., 20 Wend. (N. Y.) Am. Rep. 48. But ordinarily there 

431 ; Cofifman v. Hampton, 2 Watts, are terms and conditions which must 

& S. (Pa.) 377, 37 Am. Dec. Sll; be complied with before the title 

Tompkins v. Haas, 2 Pa. St. 74. See, fully vests. Collins v. Demerest, 45 

also, Jenness v. Wendell, 51 N. H. La. Ann, 108, 112 So. 121- See also 

63, 12 Am. Rep. 48. note in Ann. Cas. 1912A. 1128 

"Per Sergeant, J., in Coffman v. '"Jenness v. Wendell. 51 N. H. OJ, 

12 Am. Rep. 48. 



§ 2877 AGENCY. 62 

bidder until he complies with such terms and conditions.^'' Thus, if 
the article is offered on a credit, and the purchaser gives his note 
with good security, drawing interest, the purchaser is not entitled 
to the possession of the property until such note has been ten- 
dered to the seller, or a sum of money equal to the principal and 
interest which would have been due upon the note at maturity ;^^ 
and in some jurisdictions the title does not pass, where there is no 
agreement for credit, until the price is paid.^" The conditions 
prerequisite to a delivery may be waived, however; and if the 
seller delivers the property without a previous compliance with 
conditions, the delivery passes a good title. ^' If the purchaser 
does not comply with the conditions of the sale, the property hav- 
ing been knocked down to him, and fails to take the property 
thus purchased by him on the conditions of the sale, he is liable 
to the vendor for the purchase-price, the vendor holding himself 
ready to turn the property over to him."*^ The vendor may, 
however, treat the contract as rescinded, and resell the property 
and sue for damages for a breach of the contract, the measure of 
his damages then being the difference between the sale-price and 
the net proceeds of the resale."" Before a resale, however, the 
vendor should give the original purchaser reasonable notice of his 
intention to do so, and the resale should be at public auction."" Or, 
it seems, he may keep the property as his own and sue for the 
difference between the market value and the price at which the 

"Williams v. Connoway, 3 Houst. S. W. 903. But see Williams v. Con- 

(Del.) 63; Morgan v. East, 126 Ind. noway, 3 Houst. (Del.) 63. 
42, 25 N. E. 867, 9 L. R. A. 558; "' Corlies v. Gardner, 2 N. Y. 

Matthews v. McEIroy, 79 Mo. 202; Super. Ct. 345; Girard v. Taggart, 

Clark V. Greeley, 62 N. H. 394. See, 5 Serg. & R. (Pa.) 19, 9 Am. Dec. 

also, Jennings v. West, 40 Kans. 372, 327. See, also, Ansley v. Green, 82 

19 Pac 863 Ga. 181, 7 S. E. 921 ; Wells v. Day, ■ 

■^Wainscott v. Smith, 68 Ind. 312; 124 Mass. 38. 
Mazoue v. Gaze, 18 La. Ann, 31. But ™ Mount v. Brown, 33 Miss. 566, 69 

compare Gruell v. Clark, 4 Penn. Am. Dec. 362 ; Bowser v. Cessna, 62 

(Del) 321, 54 Atl. 955; Sweeney v. Pa. St. 148; Grist v. Williams, 111 

Vaughn, 94 Tenn. 534, 29 S. W. 903. N. Car. S3, 15 S. E. 889, 32 Am. St. 

"Hand v. Matthews, 208 Pa. 149, 782; Waples v. Overaker, 77 Tex. 

57 Atl. 351 ; Mitchell v. Zimmerman, 7, 13 S. W. 527, 19 Am. St. 727. See, 

109 Pa. St. 183, 58 Am. Rep. 715. also, note in 131 Am. St. 493. 

"Burt V, Kennedy, 3 Penny. (Pa.) ""Hill v. Hill, 58 111. 239; Mount 

238- Mitchell v. Zimmerman, 109 v. Brown, 33 Miss. 566, 69 Am. Dec. 

Pa 'St 183, 58 Am. Rep. 715; Swee- 362; Riggs v. Pursell, 74 N. Y. 370; 

ney v. Vaughan, 94 Tenn. 534, 29 Bowser v. Cessna. 62 Pa. St. 148. 

See, also, note in 131 Am. St. 493. 



63 AUCTIONEERS. § 2877 

property was struck off to the purchaser." If the purchaser re- 
fuse to take the property on account of fraud at the sale, or in 
the conditions, he must, if he has taken possession, usually return 
it as soon as he discovers the fraud ; but where he does not dis- 
cover it till too late to return it before suit, it has been held he can 
plead the fraud as a defense, although he has not returned the 
property. °^ Where a right of action exists against the purchaser 
to recover the purchase-price or the property, it may generally be 
exercised by either the auctioneer or the seller : for the auctioneer 
has such a special property in the articles sold that he may bring 
the action in his own name without joining his principal, the 
seller.''^ When a purchaser has given bond for the performance 
of his contract, and the sale is invalid because of the statute of 
frauds, it seems that he is not liable on the bond, as in such case 
this is also invalid."* The purchaser is entitled to all he has pur- 
chased at the sale, and if as to some portion of such property, 
however small, the vendor has no title, the vendor cannot force 
the buyer to accept the remainder, even though he offer to secure 
him in the part to which he has no title."^ Nor can the vendee 
ordinarily be compelled to accept a title which is encumbered, 
unless he had notice of such encumbrance."" The seller may be 

"Ackerman v. Rubens, 167 N. Y. Dec. 595; Pugh v. Chesseldine, 11 

405, 60 N. E, 750, 53 L. R. A. 867, Ohio 109, Zl Am. Dec. 414. 

82 Am. St. 728: "When the vendee "' Hulse v. Young, 16 Johns. (N. 

of personal property, under an exec- Y.) 1. See, also, Seller v. Block, 19 

utory contract of sale, refuses to Ark. 566; Flanigan v. Crull, 53 111. 

complete his purchase, the vendor 352. 

may keep the article for him and sue "Thomas's Exrs. v. Harrodsburg, 

for the entire purchase price; or he 3 A. K. Marsh. (Ky.) 298, 13 Am. 

may keep the property as his own Dec. 165. 

and sue for the difference between •" Pontchartrain R. Co. v. Durel, 

the market value and the contract 6 La. 481. Refusal to deliver the 

price ; or he may sell the property for property to him when he has per- 

the highest sum he can get, and formed old conditions of the sale is 

after crediting the net amount re- a breach of contract. Gruell v. 

ceived, sue for the balance of the Clark, 4 Pennew. (Del.) 321, 54 Atl. 

purchase-money." Moore v. Potter, 955. 

155 N. Y. 481, SO N. E. 271, 63 Am. ""Porter v. Liddle, 7 Mart. (O. S.) 

St. 692; Dustan v. McAndrew, 44 N. (La.) 23. See further as to what will 

Y. 72. ' justify the buyer in refusing to com- 

'^ Staines v. Shore, 16 Pa. St. 200, plete the purchase ; Clay v. Kagel- 

55 Am. Dec. 492. See as to necessity macher, 98 Ga. 149, 26 S. E. 493; 

for acting without undue delay, Min- Gormerly v. Kyle, 137 Mass. 189; 

turn v Main 7 N. Y. 220; McDow- Sohns v. Beavis, 133 App. Div. (N. 

ell V. Simms, 45 N. Car. 130, 57 Am. Y.) 717, 118 N. Y. S. 139; McCall 



§ 2878 AGENCY. 64 

said to impliedly warrant the title on an auction sale of chattels," 
but not, as a rule at least, the quality."' If there was fraud or 
mistake at the sale, it may be set aside; but the objection must be 
made before confirmation, if then discovered; but, in the absence 
of fraud, the sale will stand after it has been confirmed."' Auc- 
tioneers usually have no authority to warrant, the general rule 
being that to give them such authority it must be expressly or 
specially conferred ;"* and where an auctioneer, in the absence of 
the owner, at the sale, stated publicly that a horse he was about 
to offer was sound, and no authority was shown in the auctioneer 
to make such a statement, it was held not to be a warranty for 
which the seller was liable.'^ So the statement by an auctioneer 
as to sheep offered for sale, that "here is a nice lot of young, 
sound sheep," was held not to be a warranty that the sheep were 
in good health ;'- but where an auctioneer announced that "every- 
thing should be as represented or no sale," it was held that this 
included and applied to a mare represented to be sound.^^ 

§ 2878. Auctioneer's duties and liabilities to the vendor. — 

The auctioneer being primarily the agent of the vendor, the rules 
applicable to principals and agents generally, with regard to the 
duty of the agent to the principal, are applicable to auctioneers. 
It is the duty of the auctioneer to, obey the instructions of the 
vendor, when not contrary to law or public policy ; hence, where 
an auctioneer is instructed not to sell certain goods below a cer- 
tain price, he should start the sale at such price, and has no right 

V. Davis, 56 Pa. St. 431, 94 Am. Dec. (Ky.) 591; Hunting v. Walter, 33 

92; Millingar v. Daly, 56 Pa. St. Md. 60; Hickson v. Rucker, 11 Va. 

245. But compare Montgomery v. 135. 

Pacific Coast Land Bureau, 94 Cal. "Upton v. Suffolk County Mills, 

284, 29 Pac. 640, 28 Am. St. 122. 11 Cush. (Mass.) 586, 59 Am. Dec. 

"Jenness v. Wendell, 51 N. H. 163; The Monte AUegre, 9 Wheat. 

63, 12 Am. Rep. 48; Gray v. Walton, (U. S.) 616, 6 L. ed. 174. But an 

52 N. Y. Super. Ct. 534. See, also, auctioneer may bind himself person. 

Balte V. Bedemiller, il Ore. 27, 60 ally by his warranty. Scaling v. 

Pac. 601, 82 Am. St. 737. KnoUin, 94 111. App. 443; Dent v. 

■^ Court V. Snvder. 2 Ind. App. McGrath, 3 Bush. (Ky.) 174; Schell 

440, 28 N. E. 718, 50 Am. St. 247 ; v. Stephens, SO Mo. 375. 

Limehouse v. Gray, 3 Brev. (S. Car.) "Court v. Snvder, 2 Ind. App. 440, 

231. See, also, note in 102 Am. St. 28 N. E. 718, 50 Am. St. 247. 

607. " McGrew v. Forsythe, 31 Iowa 

™See Weaver v. Guver, 59 Ind. 179. 

195; Wood V. Winings, 58 Ind. 322; "Bailey v. Manley, 11 Vt. 157, 59 

Farmers' Bank v. Peter, 13 Bush. Atl. 200. 



65 AUCTIONEERS. § 2879 

to close such sale if the goods will not bring it/* It has been 
held that if he sells for less than the price authorized, he will be 
liable to the owner for the difference." It is the duty of an 
auctioneer, generally speaking, to conduct the sale in a manner 
that will make it binding on the vendee. But he is said to be 
answerable only for "gross" negligence; and hence, where he 
failed to comply with a recent statutory regulation which was of 
doubtful construction, it was held that he was not liable.'" As 
to funds in his hands derived from sales of the vendor's property, 
an auctioneer is in duty bound to account for these, as any other 
agent," and should keep them separate from his own. But it has 
been held that where he "mingles them with his own funds and 
those belonging to other parties, the seller becomes his general 
creditor, and has no preference over other creditors." As a gen- 
eral rule, an auctioneer is not liable for interest on money received, 
unless fraudulently withheld,'" or withheld after demand. When 
it is his duty to insure goods, and he neglects to do so, the risk is 
his own.^° If for any reason he cannot insure, he should notify 
his principal thereof. But if he insures in a solvent company, he 
will not be liable for any loss that may occur, though the com- 
pany subsequently fail to pay the insurance." It is also his duty 
to exercise reasonable care over the property in his hands which 
he is to sell ; and for loss caused by his negligence in this regard, 
he may be held liable in damages to the vendor who owns the 
same.*^ 

§ 2879. Auctioneer's duties and liabilities to purchaser. — 
The general rule applicable where one makes a contract and 
claims he was acting for an undisclosed principal obtains in the 

" Hazul V. Dunham, 1 N. Y. Super. " Gray v. Haig, 20 Beav. 219. See, 

Ct 665- William v. Poor, 3 Cranch also, Montgomery v. Pacific Coast 

(U S ) 251 Fed. Cas. No. 17732. Land Bureau, 94 Cal. 284, 29 Pac. 

'''Steel V. Ellmaker, 11 Serg. & R 640, 28 Am. St. 122; Plummer v. 

(Pa ) 86 See also, Hazul v. Dun Bankers' Surety Co., 52 Misc. (N. 

ham; 1 N. Y. Super. Ct. 720; Wilk Y.) 97, 101 N. Y. S. 529^ 

inson V. Campbell, 1 Bay (S. Car.) "Levy v. Cavanagh, 2 Bosw. (N. 

169. Compare Pennock's Appeal, 14 Y.) 100. „ , . , t -r, -> 

Pa. St. 446, S3 Am. Dec. 561, And he Turner v. Burkmshaw, L. R. 2 

cannot accept seller's unpaid notes Ch App. 488 

when authorized to sell only for cash Shoenf eld v. Fleisher, 73 III 404. 

Rindles V. Bordewyk (S. Dak.), 139 "Johnson v. Campbell, 120 Mass. 

N W 113 ^^• 

'"■Hicks v. Minturn, 19 Wend. (N. ''Maltby v. Christie, 1 Esp. 340. 

Y.) 550. 

S_CoNTRACTS, Vol. 4 



§ 288o AGENCY. 66 

case of auctioneers, and an auctioneer may be held personally 
liable as vendor if he fails to disclose the name of the party for 
whom he is selling.^^ And even where the names of the princi- 
pals were disclosed in the notices and advertisements, it was held 
that if the bills were made out in the names of the auctioneers, 
and they undertook to deliver the goods, they were personally lia- 
ble for their nondelivery.®* So, also, where the auctioneer has 
sold the goods without disclosing the name of the owner, and the 
property is afterward taken under a superior title, it has been held 
that the auctioneer will be liable to the purchaser for the purchase- 
money, in an action for money had and received.®^ Where the 
auctioneer signed the contract for a sale of land, but did not dis- 
close the principal, he was held personally liable for the purchase- 
money, including his fees, and the interest. ®° The auctioneer is 
also liable to the purchaser for his misrepresentation or fraud 
perpetrated on the purchaser and resulting in injury to him.*^ 

§ 2880. Liabilities of auctioneer to third persons — Sale of 
stolen goods. — An auctioneer is not liable to a third party 
merely for a violation of his duty to his principal. But if he 
commit an injury to such third person he may be liable. Thus, 
if he sell the property of a third party and pay over the proceeds 
to the party who has delivered the property to him, the auction- 
eer will be liable to the owner for its value in an action of trover.®^ 
But while the weight of authority is to this effect, there are cases 
apparently holding the contrary.*' He has recourse, however, in 
a proper case, upon his principal for any loss he may thus sus- 

■=■ Thomas v. Kerr, 3 Bush. (Ky.) Allen (Mass.) 339; Cockcroft v, 

619 96 Am. Dec. 262; Seemuller v. Mullcr, 71 N. Y. 367. Compare Elli- 

Fuchs, 64 Md. 217, 1 Atl. 120, 54 son v. Kerr, 86 111. 427. 

Am Rep. 766; Mercer v. Leihv, 139 "Davis v. Artingstall, 49 L. J. Ch. 

Mich 447, 102 N. W. 972; .Alills v. 609, 42 L. T. 507; Hills v. Snell, 104 

Hunt 17 Wend. (N. Y.) 333, affd,, Mass. 173, 6 Am. Rep. 216; Coles v. 

20 Wend. (N. Y.) 431. Clark, 3 Cush. (JMass.) 399; Kear- 

"Elison V. Wulff, 26 111. App. 616. ney v. Clutton, 101 Mich. 106, 59 

'^ Seemuller v. Fuchs, 64 Md. 217, N. W. 419, 45 Am. St. 394. 

1 Atl. 120, 54 Am. Rep. 766. ""Rogers v. Huie, 2 Cal. 571, 56 

™Bush V. Cole, 28 N. Y. 261, 84 Am. Dec. 363, discredited, however. 

Am Dec 343. in Swim v. Wilson, 90 Cal. 126, 27 

" Edwards v, Hodding, 1 Marsh. C. Pac. 33, 13 L. R. A. 605, 25 Am. 

P. 377. And see as to return of de- St. 110; Frizzell v. Rundle, 88 Tenn. 

posit where sale is not consummated 39l'\ 12 S. W. 918, 17 Am. St. 908. 
or the like, Robinson v. Trofitter, 11 



'Ci'J AUCTIONEERS. § 2881 

tain."" He is certainly liable where he had notice that the goods 
did not belong to his principal."^ He is also liable for goods that 
were fraudulently obtained, when he had notice of the fraud.'" 
Even if he had no notice of the fraud originally, but was notified 
thereof subsequently to the sale, he will be personally liable for 
such proceeds as he may thereafter turn over to his principal; 
but it has been held that if he turn the proceeds over without 
notice of the fraud, he will not be liable ; and for any money ad- 
vanced by him without notice of such fraud, he may hold the 
goods until he is reimbursed."^ The liability of the auctioneer 
to the true owner has been asserted where the goods had been 
stolen by the auctioneer's principal and in like cases, even though 
the auctioneer claimed to have acted in good faith.'* 

§ 2881. Auctioneer's compensation. — Where the compen- 
sation of the auctioneer is fixed by valid agreement between him- 
self and his principal this will, of course, control;"^ when no com- 
pensation has been agreed upon, the auctioneer will be entitled to 
recover on the quantum meruit, that is to say, such commissions 
as are customarily and reasonably paid for such services."" Auc- 

°°Adamson v. Jarvis, 4 Bing. 66, 13 default according to the agreement, 

E. C. L. 403. and A had a right to the immediate 

°' See cases cited in next two notes, possession of the goods without de- 

"^ Morrow Shoe Mfg. Co. v. New mand or notice. A sued the auc- 

England Shoe Co., 57 Fed. 685, 6 C. tioneer in trover, and the court held 

C. A. 508, 24 L. R. A. 417. that he was liable, and that his ig- 

°° Higgins V. Lodge, 68 Md. 229, norance and good faith constituted 

11 Atl. 846, 6 Am. St. 437; Lewis v. no defense to the action. Robinsor 

Mason, 94 Mo. SSI, S S. W. 911, 8 v. Bird, 1S8 Mass. 357, 33 N. E. 391, 

S. W. 735; Baugh v. Kirkpatrick, 35 Am. St. 495. But, in a Tennes- 

54 Pa. St. 84, 93 Am. Dec. 675. see case, it was held that the regis- 

" Swim V. Wilson, 90 Cal. 126, 27 tration of a chattel mortgage is not 
Pac. 33, 13 L. R. A. 60S, 25 Am. St. notice to an auctioneer, and that he 
110; Mohr v. Langan, 162 Mo. 474, is not liable to the mortgagee even 
63 S. W. 409, 85 Am. St. 503. In a though the mortgagor acted fraud- 
Massachusetts case A, the owner of ulently, where he has sold the prop- 
certain goods, sold them condition- erty at the instance of the mort- 
ally to B, the latter agreeing to pay gagor and turned the proceeds over 
for them in instalments and not to to him. Frizzell v. Rundle, 88 Tenn. 
sell or mortgage them as long as any 2,96, 12 S. W. 918, 17 Am. St. 908. 
payments were due. B mortgaged ""Carpenter v. LeCount, 93 N. Y. 
them to C, who took without notice 562 (holding that this agreement 
and for value. The mortgagee had need not be in writing signed by the 
the goods sold at auction to satisfy auctioneer to take the case but of 
the mortgage, which had been duly the statute of frauds) ; Cochran v. 
recorded. At the time of the exe- Johnson, 2 McCord (S. Car.) 21. 
cution of the mortgage, B was in "'Griffin v. Helmbold, 72 N. Y. 



§ 2882 AGENCY. 68 

tioneers' fees are sometimes fixed by statute; when this is the 
case, the statutory compensation covers only the services he per- 
forms as auctioneer. Where he performs other services he is en- 
titled to reasonable compensation for these, or for services beyond 
the mere selling in public to the highest bidder, and he is usually 
entitled to disbursements properly made." An auctioneer can- 
not, however, recover commission unless he has actually sold the 
property ; and this has been held although the owner sold it him- 
self, at private sale, the day before the day on which it was ad- 
vertised to be sold at auction.^^ 

§ 2882. Auctioneer's lien. — An auctioneer has a lien for his 
commission and proper expenses upon the property entrusted to 
him to sell.^" This is true so long as the goods remain in his pos- 
session, and he may generally refuse to deliver them until his 
claim therefor is paid.^ But if he delivers the goods he loses 
his lien.^ 

439. As to what are reasonable, see case first cited in this note, and Rob- 
Andrews V. Frierson, 144 Ala. 470, inson v. Green, 3 Mete. (Mass.) 159. 
39 So. 512; In re Succession of Mc- ""Elison v. Wulff. 26 III. App. 616; 
Carty, 32 La. Ann. 6; The Amy War- In re Succession of Dowler, 29 La. 
wick, 2 Spr. (U. S.) 160, Fed. Cas. Ann. 437; Thompson v. Kelly, 101 
No. 344. Mass. 291, 3 Am. Rep. 353; Harlow v. 

"Russell V. Miner, 61 Barb. (N. Sparr, IS Mo. 184; Lewis v. Mason, 

Y.) 534, 5 Lans. (N. Y.) 537. 94 Mo. 551, 5 S. W. 911, 8 S. W. 

°='Girardey v. Stone, 24 La. Ann. 735. 

286. See, also. Ward v. James, 8 ^ See cases cited in last preceding 

Hun (N. Y.) 526; Cochran v. John- note. Also, Williams v. Millington, 

son, 2 McCord (S. Car.) 21. But 1 H. Bl. 81; Lane v. Lewson, 12 Ad. 

he may be allowed for disbursements & El. 116, note. 

properly made even though the sale ^ Blum v. Torre, 3 Hill (S. Car.) 

falls through. See the Louisiana 155, Riley 153. 



CHAPTER LXII. 

BANK AND OTHER CORPORATION OFFICERS. 

§ 2885. Generally — Authority ex- § 2889. President— Manager, 
press or implied — Judicial 2890. Vice President, 
notice. 2891. Secretary. 

2886. Relation of officers to cor- 2892. Treasurer. 

poration and to one another 2893. The cashier. 
— Dealing with corporation. 2894. Tellers. 

2887. General rules as to authority 2895. Other officers and agents — 

to bind corporation. Miscellaneous. 

2888. Directors. 

§ 2885. Generally — Authority express or implied — Judi- 
cial notice. — As in other cases of agency, the authority of 
officers and agents of corporations may be either express or im- 
plied. The title of the ofhcer may, in some instances, give rise 
to the impHcation of authority, prima facie at least; but implied 
authority is usually such as is implied from custom or from 
holding the officer out as having the authority. In the case of 
some officers, the courts have taken judicial notice or knowledge 
of their usual authority over some matters, from the title and 
well known custom of officers with such title to exercise and be 
invested with such authority.^ This is particularly true, it seems, 
in regard to cashiers of banks.^ 

§ 2886. Relation of officers to corporation and to one an- 
other — Dealing with corporation. — A corporation can only 
act by or through some individual or body of individuals. The 

^American Exchange Nat. Bank terbotham, 52 Kans. 433, 34 Pac. 

V. Oregon Pottery Co., 55 Fed. 265; 1052; Sax v. Detroit &c. R. Co., 125 

Ceeder v. H. M. Loud &c. Lumber Mich. 252, 84 N. W. 314, 84 Am. St. 

Co., 86 Mich. 541, 49 N. W. 575, 24 572. 

Am. St. 134; Adams Min. Co. v. ^Sturges v. Bank of Circleville, 11 

Senter, 26 Mich. IZ; Steamboat Co. Ohio St. 153, 78 Am. Dec. 296. See 

V. McCutcheon, 13 Pa. St. 13, See, also, Robb v. Ross County Bank, 41 

also, Louisville, Evansville &c. R. Barb. (N. Y.) 586; United States v. 

Co. V. McVay, 98 Ind. 391, 49 Am. City Bank, 21 How. (U. S.) 356, 16 

Rep. 770; Union Pac. R. Co. v. Win- L. ed. 130; Merchants' Bank v. 

69 



§ 2886 AGENCY. 70 

very necessity of the case, therefore, would seem to require that it 
should have officers and representatives, and that there should be 
some modification of the ordinary rule that forbids an agent to 
redelegate his authority. The directors are deemed to primarily 
possess the charter powers, and may appoint agents and delegate 
authority.' In general, however, the law of agency applies in 
the case of officers of corporations the same as in other cases.' 
The officers are agents of the corporation and not of each other. 
Thus, the teller of an incorporated bank in receiving deposits 
is the agent of the corporation and not of the president.^ The 
cashier and directors, it is said, stand in a reciprocal relation to 
each other; the duties of the cashier are rather executive, and 
those of the directors are administrative." Officers charged with 
the general management of corporate affairs usually have express 
or implied authority to employ other agents and delegate to them 
the power to attend to the details of the business.' Owing to 
their relation with or to the corporation, officers must exercise 
complete good faith in dealing with it, and their contracts with 
it are carefully scrutinized by the courts;* but the law does not 

State Bank, 10 Wall. (U. S.) 604, officers occupy a fiduciary relation 

19 L. ed. 1008. But compare La Rose and are sometimes called trustees, 

V. Logansport Nat. Bank, 102 Ind. but as shown in the books above re- 

332, 1 N. E. 805. ferred to, where many cases are 

^Hoyt V. Thompson's Exr., 19 N. cited, they are not trustees in a tech- 

Y. 207 (writ of error dismissed, 1 nical sense. See, also, New York, P. 

Black [U. S.] 518, 17 L. ed. 65) ; & B. R. Co. v. Dixon, 114 N. Y. 80, 

Olcott V. Tioga R. Co., 27 N. Y. 21 N. E, 110; Briggs v. Spaulding, 

546, 84 Am. Dec. 298; Potts v. Wal- 141 U. S. 132, 35 L. ed. 662, 11 Sup. 

lace, 146 U. S. 689, 36 L. ed. 1135, Ct. 924. 

13 Sup. Ct. 196; Union Pac. R. Co. "Ex parte Rickey, 31 Nev. 82, 100 
V. Chicago &c. R. Co., 163 U.' S. Pac. 134, 135 Am. St. 651. 
564, 41 L. ed. 265, 16 Sup. Ct. 1173; "Bailey v. O'Neal, 92 Ark. 327, 122 
Leavitt V. Oxford &c. Min. Co., 3 S. W. 185, 135 Am. St. 185. 
Utah 265, 1 Pac. 356. See, also. In 'Northampton Bank v. Pepoon, 11 
re Taurine Co., 25 Ch. Div. 118; An- Mass. 288; Saltmarsh v. Spaulding, 
dres V. Fry, 113 Cal. 124, 45 Pac. 147 Mass. 224, 17 N. E. 316; Preston 
S34; Indianapolis, E. R. &c. R. Co. v. Missouri &c. Lead Co., 51 Wo. 43; 
V. Hyde, 122 Ind. 188, 23 N. E. 706; Hooker v. Eagle Bank, 30 N. Y. 83, 
Burrill v. Nahant Bank, 2 Mete. 86 Am. Dec. 351 ; Lewis v Albe- 
(Mass.) 163, 35 Am. Dec. 395. But marie &c. Co., 95 N. Car. 179; Pat- 
see, as to delegation of powers involv- terson v. Portland Smelting &c. 
ing judgment and discretion in some Works, 35 Ore. 96, 56 Pac. 407. 
cases, Bliss v. Kaweah Canaf & Irri- ° Pacific Vinegar &c Works v 
gation Co., 65 Cal. 502, 4 Pac. 507; Smith, 145 Cal. 352, 78 Pac. 550, 104 
Pike V. Bangor &c. R. Co., 68 Maine Am. St. 42, and note ; Port v Russell 
445. 36 Ind 60, 10 Am. Rep. 5- Mish v' 

'See Elliott Priv. Corp. (3d ed.). Main, 81 Md. 36, 31 .\tl. 799; Mill- 

§ 502; note in 17 Am. St. 298. The saps v. Chapman, 76 Miss. 942 26 



71 CORPORATION OFFICERS. § 2887 

absolutely forbid such dealings where they are open and fair," at 
least where the corporation is represented in the transaction by 
other disinterested agents having authority. 

§ 2887. General rules as to authority to bind corporation. 

— In a general way it may be laid down as a well settled rule that 
if a contract otherwise valid, made by an officer or other agent 
of a corporation, and purporting to bind it, is not without the 
scope of the agent's authority the corporation is bound thereby;^" 
but if it is beyond his powers, or outside the scope of his author- 
ity, it is not binding upon the corporation," unless there is some 
element of estoppel, acquiescence or ratification taking it out of 
the general rule.^^ Much depends upon the authority of the par- 
ticular officer, real or apparent, and the custom or course of 

So. 369, 71 Am. St. S47, and note; "Mechem Agency, § 278; Bank of 

Marr v. Marr, IZ N. J. Eq. 643, 70 Minneapolis v. Griffin, 66 111. App. 

Atl. 375, 133 Am. St. 742; Scott v. 577, affd., 168 111. 314, 48 N. E. 154; 

Farmers' &c. Bank, 97 Tex. 31, 75 West v. First Nat. Bank, 20 Hun 

S. W. 7, 104 Am. St. 835. See, also, (N. Y.) 408; Nfchols v. Oregon 

Emerado Farmers' Elevator Co. v. Short Line R. Co., 24 Utah 83, 66 

Farmers' Bank, 19 N. Dak. 270, 127 Pac. 768, 91 Am. St. 778. See, also, 

N: W. 522, 29 L. R. A. (N. S.) 567. as to apparent authority, Barber v. 

See as to contracts for compensa- Stromberg-Carlson Tel. Mfg. Co., 

tion of officer, Althouse v. Cobaugh 81 Nebr. 517, 116 N. W. 157, 18 L. 

Colliery Co., 227 Pa. St. 580, 76 Atl. R. A. (N. S.) 680n, 129 Am. St. 703; 

516, 136 Am. St. 908, and note; also Curtis Land &c. Co. v. Interior Land 

note in 139 Am. St. 619. Co., 137 Wis. 341, 118 N. W. 853, 129 

» In re Castle Braid Co., 145 Fed. Am. St. 1068. 

224; Ft. Payne Rolling Mill v. Hill, "Reagan v. First Nat. Bank, 157 

174 Mass. 224, 54 N. E. 532 ; Barnes Ind. 623, 61 N. E. 575, 62 N. E. 701 ; 

V. Spencer & Barnes Co., 162 Mich. Havens v. Bank of Tarbora, 132 N. 

509, 127 N. W. 752, 139 P^m. St. 587, Car. 214, 43 S. E. 639, 95 Am. St. 

and note; Africa v. Duluth News 627. See also, State Bank v. For. 

Tribune Co., 82 Minn. 283, 84 N. W. syth, 41 Mont. 249, 107 Pac. 914, 28 

1019, 83 Am. St. 424; United States L. R. A. (N. S.) 501; Bank of 

Steal Corp. v. Hodge, 64 N. J. Eq. United States v. Dunn, 6 Pet, (U. S.) 

807, 54 Atl. 1; Twin Lick Oil Co. v. 51, 8 L. ed. 316; First Nat. Bank v. 

Marbury, 91 U. S. 587, 23 L. ed. Lowther-Kaufman Oil &c. Co., dd W. 

328. See 1 Clark Corp. 508; 2 Cook Va. 505, 66 S. E. 713, 28 L. R. A. 

Corp. (6th ed.), § 652; 1 Elliott R. (N. S.) 511, and note. And com- 

R. (2d ed.), §§ 275, 276. See, also, pare Cushman v. Cloverland Coal 

Illinois Steel Co. v. O'Donnell, 156 &c. Co., 170 Ind. 402, 84 N. E. 759, 16 

111. 624, 41 N. E. 185, 31 L. R. A. L, R. A. (N. S.) 1078, 127 Am. St. 

265, 47 Am. St. 245. But see Aber- 391, and note. 

deen R. Co. v. Blakie, 1 Macq. 461 ; " See Merchants' Nat. Bank v. Cit- 
Pacific Vinegar &c. Works v. Smith, izens' Gas Light Co., 159 Mass. 505, 
145 Cal. 352, 78 Pac. 550, 104 Am. 34 N. E. 1083, 38 Am. St. 453 ; Fifth 
St. 42; Munson v. Syracuse &c. R. Ward Sav. Bank v. First Nat. Bank, 
Co., 103 N. Y. 58, 8 N. E. 355; War- 48 N. J. L. 513, 7 Atl. 318; Rath- 
dell v. Railroad Co., 103 U. S. 651, 26 burn v. Snow, 123 N. Y. 343, 25 
L. ed. 509. N. E. 379, 10 L. R. A. 355; Hatch 



§ 2888 AGENCY. 72 

dealing and other circumstances of the particular case. A con- 
sideration of such matters, and of the usual power of particular 
officers and agents of corporations is therefore important, and a 
brief treatment of them will be found in the following sections. 

§ 2888. Directors. — The government and general manage- 
ment of banking and other corporations are usually vested in 
directors, who are to act together as a board, and not individually 
in such matters/^ They are ordinarily elected by the stock- 
holders. The ordinary duties devolving upon the board of direc- 
tors of a bank are found in both the common law and the usage 
governing banks and banking officers in that connection ; but the 
duties may be modified or enlarged by the provisions of the char- 
ter or the general statutes under which the incorporation may 
have taken place. Indeed, the duties devolving upon the board 
of directors, are, in general, those which devolve upon the bank 
itself ; for the law requires the directors to have the general super- 
intendence and active management of the concerns of the corpo- 
ration. Bank directors are generally held bound to use such 
care and diligence as is usually exercised by good business men 
of the same kind.^* Corporate functions exercised by the board 
in many instances are delegated to individual agents for execu- 
tion, but these are under the immediate control and supervision 

V. Coddington, 95 U. S. 48, 24 L. ed. Ditch Co. v. Coffman, 11 Colo. 551, 

339; Minor v. Mechanics' Bank, 1 19 Pac. 508; National State Bank v. 

Pet. (U. S.) 46, 7 L. ed. 47; Pitts- Sandford &c. Tool Co., 157 Ind. 10, 

burgh, C. & S. L. R. Co v. Keokuk 60 N. E. 699 (under statute) ; Bank 

&c. Bridge Co., 131 U. S. 371, 33 L, of Middlebury v. Rutland &c. R. Co., 

ed. 157, 9 Sup. Ct. 770; Merchants' 30 Vt. 159. See also, as to usage of 

Bank v. State Bank, 10 Wall. (U. assenting separately as waiver of 

S.) 604, 19 L. ed. 1008. As to when meeting. Miner v. Bank of Blythe- 

the agent is liable, see Vol. I, §§ 463, ville, 89 Ark. 435, 117 S. W. 232, 131 

464; also note in 48 Am. St. 913. Am. St. 102. 

"Baldwin v. Canfield, 26 Minn. 43, " Hargroves v. Chambers, 30 Ga. 

1 N. W. 261; Couro v. Port Henry 580; Bank of ]\Iutual Redemption v. 

Iron Co., 12 Barb. (N. Y.) 27. See Hill, 56 Maine 385, 96 Am. Dec. 470; 

also, In re Marseilles &c. R. Co., Marshall v. Farmers' &c. Sav. Bank, 

7 Ch. App. 161 ; 1 Elliott R. R. (2d 85 Va. 676, 8 S. E. 586, 2 L. R. A. 

ed.) 235, 237, 240, 250, 260; TSTevada 534, 17 Am. St. 84, and note; note 

Nickel Syndicate v. National Nickel in Bosworth v. Allen, 55 L. R. A. 

Co., 96 Fed. 133; Junction R. Co. v. 751. A distinction is sometimes 

Reeve, 15 Ind. 236; Thompson v. made, where thev serve gratuitously. 

West, 59 Nebr. 677, 82 N. W. 13, See note in 55 L. R. A. 773. See 

49 L. R. A. 337; First Nat. Bank v. slso, as to when they are or are not 

Christopher, 40 N. J, L. 435, 29 Am. liable for mistakes. New Haven 

Rep. 262. But see Longmont Supply Trust Co. v. Doherty, 75 Conn, 555, 



73 CORPORATION OFFICERS. § 2888 

of the board. They are, in a general way, required to know the 
system and rules by which the business of the bank is transacted, 
and also to perform many duties with regard to the same in per- 
son.^" One of the functions which they are required to perform 
in person is the making of discounts; they may say to the cashier 
or other financial officer to make such loans as he may wish or 
as he may see proper, within a certain time and at certain sums, 
or at such sums as he may call for, up to a certain amount, at cer- 
tain rates of interest, upon designated conditions, and upon spe- 
cified security ; but while in this manner the responsibility of 
making loans and discounts is to some extent shifted, and while 
they thus avoid making each discount or loan in person, such dis- 
counts are nevertheless made on the authority of the board and at 
the discretion of its members.^" They should exercise reasonable 
supervision over such matters." The directors can bind the bank 
only by acts that are within the scope or apparent scope of their 
authority. But, in general, where, as is usual, the general man- 
agement of a corporation is intrusted to a board of directors, 
they have, as such, practically the whole corporate power in that 
regard, and may bind the corporation by any act or contract with- 
in such power," except that they cannot, ordinarily, effect any 
great and radical changes in the corporate organization, such as 
fundamental and organic changes." 

54 Atl. 209, 96 Am. St. 239, and note,; whole time to the company, and may 

Warren v. Robinson, 19 Utah 289, 57 commit details to duly authorized 

Pac. 287, 75 Am. St. 734, and note. officers and agents. Mason v. Moore, 

''1 Morse Banks & Banking (4th 7Z Ohio St. 275, 76 N. E. 932, 4 L. 

ed.), § 116. R. A. (N. S.) 597, and note.; Briggs 

^» See Bank of United States v. v. Spaulding, 141 U. S. 132, 35 L. ed. 

Dunn, 6 Pet. (U. S.) 51, 8 L. ed. 662, 11 Sup. Ct. 924. But compare 

316. Warner v. Penover, 91 Fed. 587, iZ 

" See Gibbons v. Anderson, 80 Fed. C. C. A. 222, 44 L. R. A. 761 ; Camp- 

345 ; Delano v. Case, 121 111. 247, bell v. Watson, 62 N. J. Eq. 396, 50 

12 N. E. 676, 2 Am. St. 81; Will- Atl. 120. 

iams V. McKay, 40 N. J. Eq. 189, 53 ^^See Wohlford v. Citizens' Bldg. 

Am. Rep. 775; Hun v.'Cary, 82 N. &c. Assn., 140 Ind. 662, 40 N. E. 

Y. 65, 59 How. Pr. (N. Y.) 439, 37 694, 29 L. R. A. 177, affd. 141 Ind. 

Am. Rep. 546; Wallace v. Lincoln 704, 40 N. E. 1064; Eastern R. Co. 

Sav. Bank, 89 Tenn. 630, IS S. W. v. Boston &c. R. Co., Ill Mass. 125, 

448, 24 Am. St. 625; Mutual Bldg. 15 Am. Rep. 13; Bank of Middle- 

&c. Bank v. Bossieux, 4 Hughes (U. bury v. Rutland &c. R. Co., 30 Vt. 

S.) 387, 3 Fed. 817. But they are 159. 

not liable as insurers of the fidelity ""3 Clark Corp., § 692; 1 Elliott 

of cashiers and the like, and they are R. R. (2d ed.), § 252. See also, Mo- 

not ordinarily expected to give their bile & M. R. Co v. Sterner, 61 Ala. 



§ 2889 AGENCY. 74 

§ 2889. President — Manager. — The president of a corpo- 
ration is ordinarily its chief executive officer, and he is generally 
elected by the directors and is usually one of them.^° His duties 
and functions are determined by the charter of the corporation, or 
by the general law, usage or the action of the directors. As said 
in a comparatively recent case : "The president of a corporation, 
by virtue of his office merely, has very little authority to act for 
the corporation; his povifers depend upon the nature of the com- 
pany's business and the authority given him by the board of direc- 
tors. The board of directors may invest him with authority to 
act as the chief executive officer of the company ; this may be done 
by resolution or by acquiescence in the course of dealing and man- 
ner of transacting the business of the corporation."^^ So, a text- 
writer says : "Ordinarily the position is one of dignity, and of an 
indefinite general responsibility, rather than of any accurately 
known power ;"-" but, as the same authority observes in regard to 
the president of a bank, "The president of a bank is usually ex- 
pected to exercise a more constant, immediate and personal super- 
vision over the daily affairs of the bank than is required from 
any other director."" And a president who is the general man- 
ager, or the like, usually has very broad powers. 

It is not always necessary that express authority be shown 
for the acts of the president in order to render them bind- 
ing upon the corporation. As a general rule, whatever is 
customary or necessary to be done by the executive officer, if 
done by him, will bind the corporation;^* but if the act of 
the president of a private corporation is beyond the usual 
scope of his authority, and yet within the powers of the board 
of directors to authorize him to perform, then such author- 
ity must be shown.^'' Owing to the difficulty of calling the 

559; Eidman v. Bowman, 58 111. 444, ed. 49, 3 Sup. Ct. 428, and other 

11 Am. Rep. 90; Rollins v. Clay, 33 cases. 

Maine 132; Bank Commrs. v. Bank 'M Morse Banks & Banking (4th 

of Brest, Harr. Ch. (Mich.) 106. ed.), § 143. 

=°1 Morse Banks & Banking, (4th ''1 Morse Banks & Banking (4th 

ed.), § 143. ed.), § 143. 

'''National State Bank v. Vigo "Kennedy v. Otoe County Nat. 

County Nat. Bank, 141 Ind. 352, 40 N. Bank, 7 Nebr. 59 ; First Nat. Bank 

E. 799, SO Am. St. 330. citing Taylor v. Hoch, 89 Pa. St. 324, 33 Am. Rep. 

Corp. (4th ed.), §§ 202, 236, 238, and 769. See also Wales-Riggs Planta- 

Martin v. Webb, 110 U. S. 7, 28 L. tions v. Caston (Ark.), 152 S. W. 282. 

" Marine Bank v. Clements, 3 Bos. 



75 



CORPORATION OFFICERS. 



§ 2889 



directors together so often, necessity would seem to require that 
the president have some general authority to represent and transact 
business for them in their absence ; and, at all events, the president 
usually has power to execute contracts authorized by the direc- 
tors. Even when authority from the directors is required it is 
not always essential that it should be conferred before the act is 
performed, for it may be subsequently ratified ; and this may be 
done not only by formal resolution, but by continued acquies- 
cence, provided, of course, the act be within the powers of the 
corporation and not ultra vires or illegal.^" But the president has 
no implied authority to bind the corporation outside of the ordi- 
nary course of the company's business;^' for example, the presi- 
dent of a private corporation has no power to sell the company's 
property outside the usual course of business ;^^ nor to assign 
choses in action except in the usual course of business.^' He may 
appear and answer in a lawsuit against the corporation and em- 
ploy counsel to defend.^" So, in cases of emergency or where 
the ordinary course of business warrants, the president may bring 
suits on behalf of the company as necessity or good business 
judgment dictates.^^ He may call together the board of direc- 



(N. Y.) 600; Farmers' Bank v. Mc- 
Kee, 2 Pa. St. 318. 

""Planters' Bank v. Sharp, 4 Sm 
& M. (Miss.) 75, 43 Am. Dec. 470: 
Rich V. State Nat. Bank, 7 Nebr 
201, 29 Am. Rep. 382 ; Kelsey v. Nat 
Bank, 69 Pa. St. 426; Neiffer v. Bank 
of Knoxville, 1 Head. (Tenn.) 162; 
Minor v. Mechanics' Bank, 1 Pet. 
(U. S.) 46, 7 L. ed. 47. See also as 
to the effect of usage. Merchants' 
Nat. Bank v. Citizens' Gas &c. 
Co., 159 Mass. S05, 34 N. E. 
1083, 38 Am. St. 453; Mining Co. v. 
Anglo-Californian Bank, 104 U. S. 
192, 26 L. ed. 707. And see gen- 
erally as to acquiescence and ratifica- 
tion : National Home Bldg. &c. Assn. 
V. Home Sav. Bank, 181 111. 35, 54 
N. E. 619, 64 L. R. A. 399, 72 Am. 
St. 245; National State Bank v. 
Sandford &c. Tool Co., 157 Ind. 10, 
60 N, E. 699; Cadillac State Bank v. 
Cadillac &c. Heading Co., 129 Mich. 
IS, 88 N. W. 67; Common Sense Min 
&c. Co. V. Taylor (Mo.), 152 S. W, 5. 

=' Farmers' Bank v. McKee, 2 Pa. 
St. 318. 



°° Crump V. United States Min. Co., 
7 Grat. (Va.) 352, 56 Am. Dec. 116; 
Walworth County Bank v. Farmers' 
Loan &c. Co., 14 Wis. 325. See also, 
Fulton Bank v. New York &c. Canal 
Co., 4 Paige (N. Y.) 127; Luse v. 
Isthmus &c. R. Co., 6 Ore. 125, 25 
Am. Rep. 506. But compare Mott 
V. Danville Seminary, 129 111. 403, 21 
N. E. 927. But see Trent v. Sher- 
lock, 26 Mont. 85, 66 Pac. 700. 

^Hoyt V. Thompson, 5 N. Y. 320. 
See also. First Nat. Bank v. Lucas, 
21 Nebr. 280, 31 N. W. 805. But see, 
as to power to endorse negotiable 
paper owned by the corporation, 
Jones V. Stoddart, 8 Idaho 210, 67 
Pac. 650. 

"" Savings Bank v. Benton, 2 Mete. 
(Ky.) 240. See also, Sarmiento v. 
Davis Boat &c. Co., 105 Mich. 300, 
(>?> N. W. 205, 55 Am. St. 446 ; Weth- 
erbee v. Fitch, 117 111. 67, 7 N. E. 
513. 

^' Reno Water Co. v. Leete, 17 Nev. 
203, 30 Pac. 702. 



§ 2889 AGENCY. 16 

tors in special session whenever he desires to place before them 
any matter of business requiring their attention.^^ But even 
where the president of a bank has the general authority to certify 
checks conferred upon him, it has been held that he is not there- 
by authorized to certify his own checks f^ nor has he any implied 
authority to use the funds of the bank with which to pay his 
individual obligations/* 

There is considerable conflict among the decisions as to the 
implied power of the president of a corporation, one view 
being that by virtue of his office merely, he has little, if any, 
more power than any single director.^^ At the other ex- 
treme is the popular view, adopted in some cases, that he has 
almost unlimited authority within the scope of the corporate 
powers.^" As indicated by what has already been said, the better 
view seems to be that the field of his power lies between these 
two extremes. The practical workings of modern corporations, 
the ordinary course of business, and the very necessities of the 
case would seem to require something more than the former view 
gives; and even if it cannot be assumed merely by virtue of his 
office, the president is usually given greater power, either ex- 
pressly or impliedly, by holding him out as having it or permitting 
and acquiescing in his exercise of it.^^ But it is doubtless true 

"' Union Gold Mining Co. v. Rocky &c. Inst., 63 Vt. 581, 22 Atl. 57S, 25 

IVIountain Nat. Bank, 1 Colo. 531. Am. St. 783; Hodge's Exr. v. First 

"^Clafin V. Farmers' &c. Bank, 25 Nat. Bank, 22 Grat. (Va.) 51. See 

N. Y. 293, 24 How. Pr. (N. Y.) 1, also, Des Moines Mfg. &c. Co. v. 

2 Am. Law Reg. (N. S.) 92. See also, Tilford ilill Co., 9 S. Dak. 542, 70 

Bowditch Furniture Co. v. Jones, 74 N. W. 839. 

Conn. 149, 50 Atl. 41; Wallace v. '"See 2 Thomp. Corp. (2d ed.), § 

Oceanic Packing Co., 25 Wash. 143, 1452; Matson v. Alley, 141 111. 284, 

64 Pac. 938. But compare Africa v. 31 N. E. 419; Marlatt v. Levee Steam 

Duluth News Tribune Co., 82 Minn. Cotton Press Co., 10 La. 583, 29 Am, 

283, 84 N. W. 1019, 83 Am. St. 424. St. 468; Sistare v. Best, 16 Hun (N. 

"'Chrystie v. Foster, 61 Fed. 551, Y.) 611; Steamboat Co. v. McCutch- 
9 C. C. A. 606. See also, Park Hotel eon, 13 Pa. St. 13 ; Cake v, Potts- 
Co. V. Fourth Nat. Bank, 86 Fed. 742, ville Bank, 116 Pa. St. 264, 9 Atl. 
30 C. C. A. 409. 502, 2 Am. St. 600; Morgan v. Mer- 

'' See City Flee. St. R. Co. v. First chants' Nat. Bank, 13 Lea (Tenn.) 

Nat. Exch. Bank, 62 Ark. Zi, 34 S. 234. 

W. 89, 31 L. R. A. 534, 54 Am. St. ""2 Thomp. Corp. (2d ed.) 1458, 
282 ; Brooklyn Gravel Road Co. v. 1468 ; State Nat. Bank v. Union Nat. 
Slaughter, 33 Ind. 185; Mt. Sterling Bank, 168 111. 519, 48 N. E. 82; Na- 
fta. "Tpk. Road Co. v. Loonev, 1 Mete, tional State Bank v. Sanford &c. 
(Ky.) 550, 71 Am. Dec. 491; Titus Tool Co., 157 Ind. 10. 60 N. E. 699; 
V. Cairo &c. R. Co., 37 N. J. L. 98; Jones v. Williams, 139 Mo. 1, 39 S. 
Lyndon Mill Co. v. Lyndon Literary W. 486, 40 S. W. 353, 37 L R. A. 



17 



CORPORATION OFFICERS. 



§ 2890 



that where he is not a general manager or the Hke, and is not 
held out as being the chief executive officer, the powers implied 
merely from the title of president are very limited.^' Where, 
however, he is the chief executive officer and general manager 
such powers as such an agent would naturally and customarily 
have in the business may well be implied.'" 

§ 2890. Vice-president. — It is said that a vice-president as 
such has no implied authority to bind the corporation where the 
president is present and capable of acting.*" In the absence of 
the president, however, the vice-president usually acts in his place 
with the same powers in such case." It has been held that the 
deed of a corporation may be executed as well by its vice-presi- 
dent as by its president, and that when so executed, with neces- 
sary formalities, it will be presumed that the vice-president had 
authority to act on behalf of the corporation.*^ Specia'l duties 
and grants of power are also given to the vice-president in some 
corporations. 



682, 61 Am. St. 436 ; Neiffer v. Bank 
of Knoxville, 1 Head (Tenn.) 162. 
See also, Floyd v. Matthews, 223 III. 
477, 79 N. E. 172, 7 L. R. A. (N. S.) 
376, and note, 114 Am. St. 346; Chest- 
nut St. Trust &c. Co. V. Record Pub. 
Co., 227 Pa. St. 235, 75 Atl. 1067, 
136 Am. St. 874; First Nat. Bank v. 
Colonial Hotel Co., 226 Pa. St. 292, 
75 Atl. 412. 

"1 Mor. Priv. Corp. r2d ed.), § 
537; 2 Cook Corp. (6th ed.), §§ 712, 
716; Elliott Priv. Corp. (3d ed.), § 
529; Taylor Corp. (4th ed.), §§ 202, 
236, 238; Thomp. Corp., §§ 1452, 1454; 
Templin v. Chicago &c. R. Co., 73 
Iowa 548, 35 N. W. 634; Walworth 
County Bank v. Farmers' Loan &c. 
Co., 14 Wis. 325; St. Clair v. Rut- 
ledge, 115 Wis. 583, 92 N. W. 234, 
95 Am. St. 964. 

" See 2 Thomp. Corp., § 1465, 1466, 
1474; 1 Elliott R. R. (2d ed.), §§ 
283-285, 296-298; Pettibone v. Lake 
View Town Co., 134 Cal. 227, 66 
Pac. 218; First Nat. Bank v. G. V. 
V. Min. Co., 89 Fed. 439, modified 95 
Fed. 23, 36 C. C. A. 633; Lloyd v. 
Matthews, 223 III. 477, 79 N. E. 172, 
7 L. R. A. (N. S.) 376, and note, 114 
Am. St. 346; White v. Elgin Cream- 
ery Co., 108 Iowa 522, 79 N. W. 283 ; 



Topeka Primary Assn. v. Martin, 39 
Kans. 750, 18 Pac. 941; Manross v. 
Uncle Sam Oil Co. (Kans.), 128 Pac. 
385 ; Ceeder v. H. M. Loud &c. Lum- 
ber Co., 86 Mich. 541, 49 N. W. 575, 
24 Am. St. 134; Africa v. Duluth 
News Tribune Co., 82 Minn. 283, 84 
N. W. 1019, 83 Am. St. 424; Horton 
Ice Cream Co. v. Merritt, 63 Hun (N. 
Y.) 628, 43 N, Y. St. 416, 17 N. Y. 
S. 718; Sandberg v. Victor &c. Min. 
Co., 24 Utah 1, 66 Pac. 360. 

"2 Page Cont., § 981, citing Shav- 
alier v. Grand Rapids &c. Lumber Co., 
128 Mich. 230, 87 N. W. 212. But 
this case cannot fairly be said to 
so decide. 

'^ American Exch. Nat. Bank v. 
Ward, 111 Fed. 782, 49 C. C. A. 
611, 55 L. R. A. 356; Fernald v. Spo- 
kane &c. Tel. Co., 31 Wash. 672, 72 
Pac. 462. See also. Cox v; Robinson, 
82 Fed. 277, 27 C. C. A. 120. 

*^ Ellison V. Branstrator, 153 Ind. 
146, 54 N. E. 433, citing Smith v. 
Smith, 62 111. 493; Bowers v. Hecht- 
man, 45 Minn. 238, 47 N. W. 792; 
Lewis V. Albemarle &c. R. Co., 95 N. 
Car. 179; Shaffer v. Hahn, 111 N. 
Car. 1, IS S. E. 1033; Ballard v. 
Carmichael, 83 Tex. 355, 18 S. W. 



2891 



AGENCY. 



78 



§ 2891. Secretary. — The secretary is the keeper of the cor- 
porate records," and the agent through whom it usually commu- 
nicates with the public.** But he has no inherent power by virtue 
of his office to make contracts binding upon the corporation.*^ 
The corporation may, however, become bound by ratification,*® 
and the secretary is sometimes given the powers of a manager or 
executive officer, or held out as having them and allowed to act 
in such a manner as to bind the corporation under the circum- 
stances of particular cases.*^ 

§ 2892. Treasurer. — The treasurer is usually the custodian 
of the funds and the fiscal agent of the corporation, and he gener- 
ally has authority to receive payments and to pay out money 
subject to the instruction of his superior officers. He is not, 
ordinarily, a contracting agent, and has no implied authority by 
virtue of his office alone to borrow money and give the notes of 
the corporation therefor.** But something depends on the char- 



734; Colman v. West Virginia Oil 
&c. Co., 25 W. Va, 148, 
" Smith V. Natchez Steamboat Co., 

I How. (Miss.) 479; Evans v. Lee, 

II Nev. 194 (and of the seal). See 
also, Mowbray v. Antrin, 123 Ind. 
24, 23 N. E. 858; Ellison v. Brau- 
strater, 153 Ind. 146, 54 N. E. 433. 

"2 Thomp. Corp. (2d ed.), § 1509; 
Columbia Ins. Co. v. Masonheimer, 
76 Pa. St. 138. See also, Frye v. 
Tucker, 24 111. 180; Hastings v. 
Brooklyn R. Co., 138 N. Y. 473, 34 N. 
E. 289. But see British Mut. 
Banking Co. v. Charnwood Forest R. 
Co., 18 Q. B. Div. 714, 56 L. J. Q. 
B. 449. 

*= Chicago V. Stein, 252 111. 409, 96 
N. E. 886, Ann. Cas. 1912D. 294; 
Ross Oil &c. Co. V. Estham, 73 Kans. 
464, 85 Pac. 531; Farrell v. Gold, 
Flint Min. Co., 32 Mont. 416, 80 Pac. 
1027; Harris v. Congress Hall. Hotel 
Co., 76 N. J. L. 367, 70 Atl. 330. See 
also, Taylor v. Sutherlin-IMeade To- 
bacco Works, 107 Va. 787, 60 S. E. 
132, 14 L. R. A. (N. S.) 1135. And to 
the same effect are Williams v. Ches- 
ter &c. R. Co., 5 Eng. L. & Eq. 497; 
Read V. Buffum, 79 Cal. 11, 21 Pac. 
555, 12 Am. St. 131 ; Wolf v. Daven- 
port &c. R. Co., 9Z Iowa 218, 61 N. 



W. 847; Bradford Belting Co. v. 
Gibson, 68 Ohio St. 442, 67 N. E. 888. 

" New England Marine Ins. Co. v. 
De Wolf, 8 Pick. (Mass.) 56. See 
also, Fawcett v. New Haven Organ 
Co., 47 Conn. 224. 

"Latrobe First Nat. Bank v. Gar- 
retson, 107 Iowa 196, 11 N. W. 856; 
Homan v. Brooklyn Life Ins. Co., 
9 Mo. App. 596; Conover v. AIu- 
tual Ins. Co., 1 N. Y. 290, 4 How. 
Pr. (N. Y.) 365; Chew v. Henrietta 
INIia. &c. Co., 1 McCrary (U. S.) 
222, 2 Fed. 5. 

" Craft V. South Boston R. Co., 150 
Mass. 207, 22 N. E. 920, 5 L. R. A. 
641. See also. Chemical Nat. Bank 
V. Wagner, 93 Ky. 525, 20 S. W. 535, 
40 Am. St 206; Fifth Ward Sav. 
Bank v. First Nat. Bank, 48 N. J. L. 
513, 7 Atl. 318; Davis Sewing Ma- 
chine Co. V. Best, 105 N. Y. 59, 11 
N. E. 146; also. Page v. Fall River 
&c. R. Co., 31 Fed. 257, revd. 145 U. 
S. 637. 36 L. ed. 851, 12 Sup. Ct. 980 • 
Appeal of Philler, 161 Pa. St. 157, 28 
Atl. 1072. But see Credit Co .v. 
Howe Machine Co., 54 Conn. 357, 8 
Atl. 472. 1 Am. St. 123; Corcoran v. 
Snow Cattle Co., 151 Mass. 74, 23 
N. E. 727; Narragansett Bank v. At- 
lantic Silk Co., 3 Mete. (Mass.) 282. 



79 CORPORATION OFFICERS. § 2893 

acter of the corporation and its business ;*" and usage and acquies- 
cence may broaden the ordinary powers as to those who deal with 
the corporation through him upon his apparent authority in good 
faith."" 

§ 2893. The cashier. — The cashier of a bank is its financial 
agent, who usually has the immediate charge of its currency and 
bullion as well as the securities and paper of the bank generally ; 
and it is his duty, under the direction of the board of directors, 
to loan money of the bank, discount notes on its behalf, collect its 
debts, and do whatever is necessary and proper to receive or 
pass away the funds of the bank for banking purposes." The 
Supreme Court of the United States has defined the ofiice and 
its ordinary duties in a general way as follows : "The court 
defines the cashier of the bank to be an executive officer, by 
whom its debts are received and paid, and its securities taken 
and transferred, and that his acts, to be binding upon a bank, 
must be done within the ordinary course of his duties. His ordi- 
nary duties are to keep all the funds of the bank, Its notes, bills, 
and other choses in action, to be used from time to time for the 
ordinary and extraordinary exigencies of the bank. He usually 
receives directly, or through the subordinate officers of the bank, 
all moneys and notes of the bank, delivers up all discounted notes 
and other securities when they have been paid, draws checks to 
withdraw the funds of the bank where they have been deposited, 
and, as the executive officer of the bank, transacts most of its 
business.'"^^ 

The cashier is ordinarily selected by the board of directors, but 
need not be and usually is not a member of such board. He is 
usually required to give bond for the faithful performance of his 

"See Matson v. Alley, 141 III. 284, revd. 145 U. S. v, 36 L. ed. 851, 

31 N. E. 419; Merchants' Nat. Bank 12 Sup. Ct. 980; Sun Printing &c. 

V. Citizens' Gas &c. Co., 159 Mass. Assn. v. Moore, 183 U. S. 642, 46 

505, 34 N. E. 1083, 38 Am. St. 453. L. ed. 366, 22 Sup. Ct. 240. 

"Chicago Tip &c. Co. v. Chicago "Whart. Agency, § 684; Reinhard 

Nat. Bank, 176 111. 224, 52 N. E. 52; Agency, § 438. 

Merchants' Nat. Bank v. Citizens' "United States v. City Bank, 21 

Gas &c. Co., 159 Mass. 505, 34 N. How. (U. S.) 356, 364, 16 L. ed. 130. 

E. 1083 38 Am. St. 453 ; Blake v. Do- See also, Merchants' Bank v. State 

mestic Mfg. Co., 64 N. J. Eq. 480, 38 Bank, 10 Wall. (U. S.) 604, 19 L. ed. 

Atl. 241. To same effect, Page v. 1008. 
Fall River &c. R. Co., 31 Fed. 257, 



§ 2893 AGENCY. 80 

duties. =^ The cashier has power to bind the bank by all his acts 
and conduct that are within the general scope of his authority ; 
and where the facts are undisputed and there is no question of 
particular usage, acquiescence or the like, whether the act is or 
is not within such scope is considered to be a question of law for 
the court, and not for the determination of the jury. But in most 
cases, perhaps, the question as to authority in the particular in- 
stance is a mixed question of law and fact." He has power to 
draw on the funds of the bank deposited to its credit in other 
banks, for the purposes of paying its debts, selling drafts, dis- 
counting notes, and the like."' When such a check or draft is 
ambiguous, it has been held that parol evidence may be introduced 
to show that the instrument was drawn by the cashier as such, and 
the purpose for which the draft was made or the check given.^° 
The cashier has also the inherent power to certify checks, °' and 
to buy and sell bills of exchange, when the bank engages in this 
branch of business ;°* he may also, as a part of his usual business, 
bind the bank by indorsing negotiable paper for collection or dis- 
count, or for payment of the debts of the bank.^° Although a 
cashier may be forbidden to do certain acts by the directors, yet, 
if the acts are within the ordinary scope of a cashier's duties and 
within his apparent authority, such restriction ig not binding on 
innocent third parties, unless they have notice thereof, or unless 
the act be ultra vires ;*"" he has no implied power to bind the bank 
outside the usual course of business, however."^ But here, as 

" Morse Banks & Banking (4th chants' Bank v. State Bank, 10 Wall. 

ed.), § 16. (U. S.) 604, 19 L. ed. 1008. 

"•Peninsular Bank v. Hanner, 14 °»2 Thomp. Corp. (2d ed.), §§ 

Mich. 208. But see Gale v. Chase 1540, 1542; Robb v. Ross County 

Nat. Bank, 104 Fed. 214, 43 C. C. Bank, 41 Barb. (N. Y.) 586; Fleck- 

A. 496; Merchants' Bank v. State ner v. Bank of United States, 8 

Bank, 10 Wall. (U. S.) 604, 19 L. Wheat. (U. S.) 338, 5 L. ed. 631. 

ed. 1008; :\Iartin v. Webb, 110 U. S. "See 2 Thomp. Corp. (2d ed.), § 

7, 28 L. ed. 49, 3 Sup. Ct. 428. 1536; Hartford Bank v. Barry, 17 

'"'Reinhard Agency, § 438. Mass. 94; West St. Louis Sav. Bank 

°° Mechanics' Bank v. Bank of Co- v. Shawnee County Bank, 95 U. S. 

lumbus, 5 Wheat. (U. S.) 326, S L. 557, 24 L. ed. 490. 

ed. 100. *" Merchants' Bank v. State Bank, 

"Farmers' & Mechanics' Bank v. 10 Wall. (U. S.) 604, 19 L. ed. 1008. 

Butchers' & Drovers' Bank, 16 N. Y. " Lamb v. Cecil, 25 W. Va. 288. 

125, 69 Am. Dec. 678; Clarke Nat. See also. Bank of Commerce v. Hart, 

Bank v. Bank of Albion, 52 Barb. i1 Nebr. 197, 55 N. W. 631, 20 L. R. 

(N Y) 592- Muth V. St. Louis A. 780, 40 Am. St. 479; Cochecho 

Trust Co., 88 Mo. App. 596; Mer- Nat. Bank v. Haskell, 51 N. H. 116, 



8l CORPORATION OFFICERS. § 2893 

elsewhere in the law of agency, the corporation is often liable 
because it has held him out as having authority or as having acqui- 
esced so that he has apparent authority to do the particular act."^ 
As to the forms of contract by which he may bind his principal, 
the general subject has already been considered in connection with 
that of an agent's execution of authority."' It may be said here, 
however, that he may make a valid written contract for his prin- 
cipal, either as maker or indorser of paper, by acting ostensibly 

in the name of such principal; as, " bank, by , 

cashier.""* But it is not necessary that this precise form should 
be used, and other forms, showing the intention to bind the bank 
as such, and not the cashier individually, have been held good 
for that purpose; as simply "A. B., cashier," or "A. B., cashier 
of bank,""° his signature as "cashier" being generally in- 
terpreted to imply an intention to bind the bank.°° It has also 
been held that the cashier of a bank may, as an incident of hi^ 
power to collect the debts of the bank, turn over to an attorney for 
collection the notes and claims of the bank, representing debts 
due to it by others, if it becomes necessary to do so,"' and that he 
may borrow money for the bank and execute the company's paper 
for the same."^ The directors may deprive the cashier of this 
power by placing it in the hands of some other officer, or one es- 
pecially appointed for that purpose ; but as it is a common usage 

12 Am. Rep. 67; Allen v. First Nat. 354; Oakland County Sav. Bank v. 

Bank, 127 Pa. St. 51, 17 Atl. 886, 14 State Bank, 113 Mich. 284, 17 N. W. 

Am. St. 829; United States v. City 453, 67 Am. St. 463; Marshall v. 

Bank, 21 How. (U. S.) 356, 16 L. Archie Bank, 76 Mo. App. 92; Sim- 

ed. 130. He has no implied power mons Hardware Co. v. Bank of 

to give mortgages on the bank's Greenvi/ood, 41 S. Car. 177, 19 S. E. 

property and transfer its assets. Bank 502, 44 Am. St. 700; note to Corser 

of Gloster v. Hindman, 95 Miss. 742, v. Paul, 11 Am. Dec. 759-763. 

50 So. 65, Ann. Cas. 1912A. 93, and °' See ante, § 2834 et seq. 

note. See also as to lease, Spongberg "Spear v. Ladd, 11 Mass. 94. 

V. First Nat. Bank, 18 Idaho 524, 110 °° Bank of Genesee v. Patchin Bank, 

Pac. 716, Ann. Cas. 1912A. 95, and 13 N. Y. 309; Robb v. Ross County 

note Bank, 41 Barb. (N. Y.) 586; Hough- 

"'See Davenport v. Stone, 104 ton v. First Nat. Bank, 26 Wis. 663, 

Mich. 521, 62 N. W, 722, 53 Am. 7 Am. Rep. 107. 

St. 467 ; Havens v. Bank of Tarboro, "" See ante, § 2836. 

132 N. Car. 214, 43 S. E. 639, 95 "Eastman v. Coos Bank, 1 N. H. 

Am. St. 627. See also, Spongberg v. 23. 

First Nat. Bank, 18 Idaho 524, 110 "Chemical Nat. Bank v. Kohner, 

Pac. 716, Ann. Cas. 1912A. 95 ; L'Her- 8 Daly (N. Y.) 530, 58 How. Pr. (N. 

bette V. Pittsfield Nat. Bank, 162 Y.) 267. 
Mass. 137, 38 N. E. 368, 44 Am. St. 

6 — Contracts, Vol. 4 



§ 2894 AGENCY. 82 

among banks for the cashier to discharge that duty, it has been 
held that, in the absence of notice of the deprivation of such 
power, third parties would be protected in dealing with the cashier 
on the assumption that he had such authority/" A cashier may 
also perform many acts for his bank which are not a portion of his 
inherent authority, but which he has been especially authorized 
to do by the charter, or by the vote of the directors, or even by 
the custom of bankers in the particular community. But, as al- 
ready stated, he can only bind the bank by acts within the scope 
of his employment, real or apparent ; he cannot, for example, 
bind his principal by official indorsement of his, the cashier's, 
individual note;^" nor has he any authority to draw a draft in the 
name of his principal in paj'ment of his own debt.'^ He cannot 
render the bank liable for any acts or declarations done or made 
in the pursuit of his private business;" nor can he bind the bank 
by representation as to the solvency of a third person in a trans- 
action with which the bank is in no way concerned.'^ 

§ 2894, Tellers. — Cashiers usually have under them as as- 
sistants certain officers called "tellers." These are the cashier's 
subordinates, but they are not subagents in the sense of rendering 
him liable for their defaults. Tellers, where the business justi- 
fies it, are divided into paying tellers and receiving tellers ; and, 
as the respective terms indicate, the one is engaged in paying out 
and the other in taking in the moneys of the bank. These officers 
are but the cashier's arms, so to speak, by which different por- 
tions of his own functions are performed.''* They only perform 
such portions of the business, as a rule, as would otherwise be 
entrusted to the cashier, but this is not because he has not the time 
to do such business himself ; and, hence, their functions cannot 
be said to be independent of, but rather are concurrent with, those 
of the cashier. Yet it is not meant that they have the general 

™ Grain v. First Nat. Bank, 114 '"Allen v. First Nat. Bank, 127 

111. 516, 2 N. E. 486. Pa. St. 51, 17 Atl. 886, 14 Am. St. 

"West St. Louis Sav. Bank v. 829. 

Shawnee County Bank, 95 U. S. 557, "Tavlor v. Commercial Bank, 174 

24 L. ed. 490. N. Y. 181, 66 N. E. 726, 62 L. R. A. 

"Campbell v. -Manufacturers' Nat. 783, 95 Am. St. 564. 

Bank, 67 N. J. L. 301, 51 Atl. 497, "Merchants' Bank v. State Bank, 

91 Am. St. 438. 10 Wall. (U. S.) 604, 19 L. ed. 1008. 



83 CORPORATION OFFICERS. § 2895 

powers of a cashier, for they are agents with Hmited powers/' 
Where a statute authorized a "bank" to receive money on deposit, 
it was held that the cashier, as the agent of such bank, was author- 
ized to receive money on deposit, receipt for the same, and enter it 
upon the books of the bank, and that the bank would be bound by 
his act.''® Generally, a person desiring to make a deposit in a 
bank should place it with the receiving teller, as the paying teller 
may not be authorized to receive money for the bank ; and it has 
been held that if he receives it nevertheless, he thereby becomes 
the agent of the depositor, and renders the bank liable only in the 
event he pays the money over to the proper officer and it becomes 
a portion of the funds of the bank ;" but this seems questionable, 
at least where the deposit is made at the window of the receiv- 
ing teller.''^ 

§ 2895. Other officers and agents — Miscellaneous. — Ques- 
tions have arisen as to the authority of many other agents of cor- 
porations and the binding effect of their acts in various instances, 
but they have been answered by the application of the general 
rules already stated, and it is unnecessary to consider them at 
length or in detail. Attention is called, however, to some of the 
most important. As already shown, managing agents or super- 
intendents having general authority over the entire business 
usually have very comprehensive powers, and may do such acts as 
are appropriate and usual in carrying on the business,'^ but they 
cannot bind the corporation by acts on their face for their own 

" See Walker -v. St. Louis Nat. Jackson Ins. Co. v. Cross, 9 Heisk. 

Bank, S Mo. App. 214. See also, Se- (Tenn.) 283. 

curity Bank v. Nat. Bank, 67 N. Y. '"Langan v. Great Western R. Co., 

458, 23 Am. Rep. 129. But com- 30 L. T. (N. S.) 173; Baird Lum- 

pare Clews v. Bank of N. Y. Nat. ber Co. v. Devlin, 124 Ala. 24S, 27 

Bank Assn., 114 N. Y. 70, 20 N. E. So. 425; New Albany &c. R. Co. v. 

852 Haskell, 11 Ind. 301; Louisville E. 

'"State Bank v. Kain, 1 111. 75; & S. L. R. Co. v. McVay, 98 Ind. 

Squires v. First Nat. Bank, 59 111. 391, 49 Am. Rep. 770; Kansas City 

App. 134. V. Cullinan, 65 Kans. 68, 68 Pac. 

"Thatcher v. Bank of State of 1099; Fidelity & Casualty Co. v. 

New York, 5 Sandf. (N. Y.) 121. Field, 2 Nebr. (unof.) 442, 89 N. W. 

See East River Nat. Bank v. Gove, 249; Sacalaris v. Eureka &c. R. Co., 

57 N. Y. 597. 18 Nev. 155, 1 Pac. 835, 51 Am. Rep. 

"This is criticised in 2 Thomp. 737; Sun Printing &c. Assn. v. 

Corp. (2d ed.), § 1549. See also, Moore, 183 U. S. 642, 46 L. ed. 366, 

22 Sup. Ct. 240. 



§ 2895 AGENCY. 84 

benefit and not for the corporation/" nor, in general, by any act 
which is within neither the real nor the apparent scope of their 
authority." So, of course, intermediate and subordinate agents 
have limited authority and cannot bind the corporation outside 
of its scope, real or apparent.'^ But an agent, though limited in 
authority to some particular purpose or branch of the business, 
may have a somewhat general authority over that particular 
subject,*' and here, too, by holding the agent out as having author- 
ity or permitting its exercise and acquiescing therein, the corpo- 
ration may be held bound to third persons acting in good faith by 
his acts within such apparent authority. Thus, a railroad sta- 
tion agent has no general authority over the entire business and 
management of the company, but he usually has power to make 
contracts in regard to furnishing cars or shipments over the line 
at his own station ; and when proof is made of his general author- 
ity to make contracts in regard to such shipments his power to 
contract with reference to the necessary and ordinary details 
thereof is implied or inferred therefrom.** While such an agent 
usually has no authority to bind the company by contract to carry 
beyond its own line,*^ yet if he has been held out by the company 
as having such authority, as where such is its usual course of busi- 
ness, he may bind the company thereby.*" £0, generally, he may 

™1 Ell. R, R. (2d. ed.), §§ 222, 296, == See 1 Elliott R. R. (2d ed.) 300. 

297; Willis v. Toledo &c. R. Co., 72 ^Wood v. Chicago &c. R. Co., 68 

Mich. 160, 40 N. W. 205 ; ante, § 2889. Iowa 491, 27 N. W. 473, 56 Am. Rep. 

See also, Cushman v. Cleveland Coal 861 ; Marsh v. Chicago &c. R. Co., 79 

&c. Co., 170 Ind. 402, 84 N. E. 759, Iowa 332, 44 N. W. 562; Deming v. 

16 L. R. A. (N. S.) 1078, 127 Am. Grand Trunk R. Co., 48 N. H. 455, 2 

St. 391, Am. Rep. 267; Blodgett v. Abbott, 72 

"Breed v. First Nat. Bank, 4 Colo. Wis. 516, 40 N. W. 491, 7 Am. St. 

481 ; Jackson Paper Co. v. Commer- 873. 

cial Nat. Bank, 199 111. 151, 65 N. E. »° 1 Elliott R. R. (2d ed.), § 303. 

136, 59 L. R. A. 657, 93 Am. St. 113; "'Grover &c. Co. v. Missouri Pac. 

Trent v. Sherlock, 26 Mont. 85, 66 R. Co., 70 Mo. 672, 35 Am. Rep. 444, 

.Pac. 700; Cosh-Murray Co. v. Adair, See also, 1 Elliott R. R. (2d ed.), § 

9 Wash. 686, 38 Pac. 749. See also, 303; Hansen v. Flint &c. R. Co., 73 

Huntington v. Attrill, 118 N. Y. 365, Mo. 346, 41 N. W. 529, 9 Am. St. 

23 N. E. 544. 791. So general freight agents have 

'^ Southern R. Co. v. Grant, 136 been presumed to have this power. 

Ga. 303, 71 S. E. 422, Ann. Cas. 1912C. St. Louis &c. R. Co. v. Elgin Con- 

472; Willis v. Toledo &c. R. Co., 72 densed Milk Co., 175 III. 557, 51 

Mich. 160, 40 N. W. 205; Little v. N. E. 911, 67 Am. St. 238; Baker v. 

Kerr, 44 N. J. Eq. 263, 14 Atl. 613; Chicago &c. R. Co., 91 Minn. 118, 97 

Lipscomb v. Houston &c. R. Co., 95 N. W. 650; Fremont &c. R. Co. v. 

Tex. 5, 64 S. W. 923, 55 L. R. A. New York &c. R. Co., 66 Nebr. 159, 

869, 93 Am. St. 804. 92 N. W. 131, 59 L. R. A. 939. 



8s 



CORPORATION OFFICERS. 



2895 



bind the company within the limits of his apparent authority upon 
which others rightfully act in good faith, even though he has 
secret instructions to the contrary." But his authority, real or 
apparent, does not ordinarily extend to the control of the com- 
pany's business at other stations,*'* and he cannot make a contract 
binding upon the company for his own benefit and unknown to the 
company.*" Conductors have no general authority to make con- 
tracts for the company, but in an emergency, when necessity 
seems to require it, they may have this power."" The rules in 
regard to ratification by the corporation of contracts which the 
corporation could have made also apply to such agents as well as 
to others."^ 



"Wood V. Chicago &c. R. Co., 68 
Iowa 491, 27 N. W. 473, 56 Am. 
Rep. 861; Pruitt v. Hannibal &c. R. 
Co., 62 Mo. 527. See also, 1 Elliott 
R, R. (2d ed.), § 303. 

""Voorhees v. Chicago &c. R. Co., 
71 Iowa 735, 30 N. W. 29, 60 Am. 
Rep. 823. See also, Missouri Pac. 
R. Co. V. Stults, 31 Kans. 752, 3 Pac. 
522; Gulf, C. & S. F. R. Co. v. 
Hodge, 10 Tex. Civ. App. 543, 30 S. 
W. 829. 

"Willis V. Toledo &c. R. Co., 72 
Mich. 160, 40 N. W. 205 ; Pegram v. 
Charlotte &c. R. Co., 84 N. Car. 696, 
21 Am. Rep. 639. 

°° Bonnette v. St. Louis &c. R. Co., 
87 Ark. 197, 112 S. W. 220, 16 L. R. 
A. (N. S.) 1081, 128 Am. St. 30; 
Terre Haute &c. R. Co. v. McMurray, 
98 Ind. 358, 49 Am. Rep. 752; Sloan 



V. Central Iowa R. Co., 62 Iowa 728, 
16 N. W. 331. See also, Crosan v. 
New York &c. R. Co., 149 Mass. 196, 
21 N. E. 367, 3 L. R. A. 776, 14 Am. 
St. 408; Wright v. Glens Falls &c. R. 
Co., 24 App. Div. (N. Y.) 617, 48 N. 
Y. S. 1026. And see, as to foreman or 
other subordinate agent having such 
power in an emergency, Salter v. 
Nebraska Tel. Co., 79 Nebr. 373, 112 
N. W. 600, 13 L. R. A. (N. S.) 545; 
Texas Bldg. Co. v. Albert, 57 Tex. 
Civ. App. 638, 123 S. W. 716. 

"2 Thomp. Corp. (2d ed.), § 1603; 
3 Clark Corp., § 715; 1 Beach Priv. 
Corp., §§ 194, 197; Cairo &c. R. Co. 
V. Mahoney, 82 111. 73, 25 Am. Rep. 
299; Cadillac State Bank v. Cadillac 
Stave Heading Co., 129 Mich. 15, 
88 N. W. 67 ; Hooker v. Eagle Bank, 
30 N. Y. 83, 86 Am. Dec. 351. 



CHAPTER LXIIL 



FACTORS AND BROKERS 



§ 2900. Factors and brokers — Defini- 
tion and distinction. 

2901. Authority — How conferred. 

2902. Extent of authority — Usage. 

2903. Implied and particular au- 

thority of factors. 

2904. ImpHed and particular au- 

thority of brokers. 

2905. Relation between principal 

and factor or broker — Gen- 
eral obligations of factors 
and brokers to principal. 

2906. Duties and obligations of 

brokers and factors to prin- 
cipals. 



§ 2907. Rights and remedies of 
broker as against principal 
— Compensation — Real es- 
tate brokers. 

2908. Obligations of principal to 

factor — Lien of factor. 

2909. Liability of principal to third 

parties. 

2910. Rights and remedies of 

factor against third parties. 

2911. Rights and remedies of prin- 

cipal as to third parties. 

2912. Del credere factors. 



§ 2900. Factors and brokers — Definition and distinction. — 

Factors and brokers are both agents to sell property of another 
or to negotiate contracts with reference thereto; and both are 
usually compensated by a commission;^ but there is at least one 
clear distinction, namely, a factor is entrusted with the property, 
while a broker is not. The former is "an agent who, by virtue 
of authority delegated to him for that purpose, undertakes to sell 
goods or merchandise consigned or delivered to him by his prin- 
cipal, for a compensation called a commission or factorage, which 
is usually a percentum of the proceeds. For these reasons he is 
also called a 'consignee' and 'commission merchant,' and the 
goods sent to him at any one time are called a 'consignment' of 
goods. "^ A broker is an agent to negotiate contracts or make bar- 
gains between other persons for a commission or compensation 



M Parson Cont. (9th ed.), 91. 

' Reinhard Agency, § 12. A del 
credere factor or agent is a factor 
who, for an additional compensation, 
guarantees the payment of the debt 
due from the buyer of goods of such 
agent. The words del credere are 
of Italian origin, signifying a guar- 



anty or warranty. The factor is 
said to be acting or selling upon a 
del credere commission, and his extra 
compensation is so called. Morris 
V. Cleasby, 4 M. & G. 566; Grove v. 
Dubois, 1 T. R. 112; Story Agency 
(9th ed.), § 33; post, § 2912. 



86 



8? 



FACTORS AND BROKERS. 



2900 



commonly called a brokerage, and is a negotiator or middleman 
usually having nothing to do with the custody of the property/ 
but he may also, if authorized, make the contract for the parties/ 

§ 2901. Authority — How conferred. — Factors and brokers, 
like other agents, derive their authority from the appointment 
of the principal, accepted by them.° But this may be either ex- 
press or implied,^ and the extent of the authority is often very 
largely determined by usage. It is not, ordinarily, required to be 
in writing;^ but there are statutes in some jurisdictions providing 



'Story Agency (9th ed.), § 28; 
Evans' Remuneration of Commission 
Agents (2d ed.) 36; Mechem Agency, 
§ 927; Baring v. Corrie, 2 B. & Aid. 
137; Haas v. Ruston, 14 Ind. App. 
8, 42 N. E. 298, 56 Am. St. 288. And 
as when shown by these authorities, 
a broker usually has no authority to 
buy and sell in his own name. 

* Story Agency (9th ed.), § 28>; 
Evans' Remuneration of Commission 
Agents (2d ed.) 36. There are vari- 
ous classes or kinds of brokers, the 
most common and important of 
which are the following: Bill and 
note brokers negotiate the sale and 
purchase of bills of exchange and 
notes. Bouv. Law Diet. Tit. Brokers. 
Exchange brokers negotiate bills of 
exchange drawn on foreign coun- 
tries, or on other places in this coun- 
try. Insurance brokers procure in- 
surance and negotiate between in- 
surers and insured. See also, 16 
Am. & Eng. Encyc. of Law (2d ed.) 
970. Merchandise brokers negotiate 
the sale of merchandise without hav- 
ing its custody as a factor usually 
has. Bouv. Law Diet. Tit. Brokers. 
Real estate brokers are those who ne- 
gotiate between buyers and sellers pi 
real estate. Among the duties most 
generally performed by them are 
those of finding purchasers for per- 
sons who have property for sale, and 
finding sellers for those desiring to 
purchase such property. In many in- 
stances they also engage in letting or 
leasing property and collecting rents, 
and in negotiating the loans of 
money on mortgages and other se- 
curities. Stock brokers are brokers 
employed to buy and sell shares of 
stock in incorporated companies, of 



government bonds and the like. See 
also, as to marriage brokers and ship 
brokers, the same dictionary. One 
person or firm may, of course, carry 
on several different kinds of brok- 
erage and belong to more than one 
of the classes mentioned. Pawn- 
brokers are not strictly brokers. See 
Mechem Agency, § 939. 

° See Rapp v. Livingston, 14 Daly 
(N. Y.) 402; Jesson v. Texas Land 
&c. Co., 3 Tex. Civ. App. 25, 21 S. 
W. 624. See also, as to acceptance. 
First Nat. Bank v. Free, 67 Iowa 11, 
24 N. W. 566; Cameron v. Seaman, 
69 N. Y. 396, 25 Am. Rep. 212. See 
as to what is not sufficient to show 
employment, Geier v. Howells, 47 
Colo. 345, 107 Pac. 255, 27 L. R. A. 
(N. S.) 786; E. A. Strout Co. v. 
Gay, 105 Maine 108, 72 Atl. 881, 24 
L. R. A. (N. S.) 562, and note; Rait 
v. Carpenter, 138 N. Y. S. 460; note 
to Chaffee v. Widman, 139 Am. St. 
220. 

"Dows v. McCleary, 14 111. App. 
137; Delano v. Smith Charities, 138 
Mass. 63 ; Smith v. Clews, 105 N. Y. 
283, 11 N. E. 632, 59 Am. Rep. 502. 
But a letter to a broker stating that 
the writer had paid a certain price 
for certain property and would not 
sell it for less than a specified sum, 
but that the broker could have all 
over that sum, has been held to be, 
at most, an authority to find a buyer 
and not to authorize the broker to 
make the sale. Campbell v. Gallo- 
way, 148 Ind. 440, 47 N. E. 818. Com- 
pare, however, Peterson v. O'Con- 
nor, 106 Minn. 470, 119 N. W. 243, 
130 Am. St. 618, and note. 

' Friedman v. Suttle, 10 Ariz. 57, 
85 Pac. 726, 9 L. R. A. (N. S.) 933, 



§ 2902 AGENCY. 88 

for written authority, at least in some instances.' A statute pro- 
viding that no contract for commission for finding a purchaser 
for real estate of another shall be valid unless in writing, signed 
by the owner or his duly authorized agent, does not, however, 
invalidate a contract between the owner's agent and a subagent 
for a commission to be paid by such agent to the subagent for the 
sale of the principal's real estate." 

§ 2902. Extent of authority — Usage. — General usage or 
custom may have an important bearing upon the question of au- 
thority, both as to its creation and its extent. But it is usually 
as to the latter that it finds its application. It is seldom that it 
determines the question of employment; but when that is once 
proved or it is conceded that the factor or broker has a general 
authority in the matter the particular authority or the extent of 
his authority is often determined largely by the usage and custoin 
of the business." Usage, however, cannot override positive in- 
structions," as between the parties ; and it cannot authorize a 
contract contrary to public policy and illegal. ^^ So, it is a general 
I'ule that the usage must be notorious or well known and gen- 
eral.^^ Where such is the case, the principal will usually be 

and note; Deshler v. Beers, 32 111. "Riday v. Oil &c. Pub. Co., 7 N. 

368, 83 Am. Dec. 274. Y. St. 31. See also, Rich v. Boyce, 

' See also, as to when contract 39 Md. 314 ; Day v. Holmes, 103 

is within the statute of frauds, as Mass. 306; Hutchings v. Ladd, 16 

not to be performed within a year, Mich. 493; Cotton v. Hiller, 52 IVIiss. 

note in IS L. R. A. (N. S.) 323-326. 7; Bliss v. Arnold, 8 Vt. 252, 30 Am. 

° Provident Trust Co. v. Darrough, Dec. 467. 

168 Ind. 29, 78 N. E. 1030. See also, " Wheeler v. Newbould, 16 N. Y. 

for other decisions under such stat- 392. See also, Healey v. Mann- 

utes and their effect in preventing heimer, 74 Minn. 240. 76 N. W. 1126; 

the agent recovering compensation Hopper v. Sage, 112 N. Y. 530, 20 

from the principal, note in 9 L. R. N. E. 350, 8 Am. St. 771; Newbold 

A. (N. S.) 933, et seq. v. Wright, 4 Rawle (Pa.) 195. 

"Wilhitev. Houston, 200 Fed. 390; "Lyon v. Culbertson, 83 111. 33, 

Johnston v. Usborne, 11 Ad. & El. 25 Am. Rep. 349; Wooters v. Kauf- 

549, 39 E. C. L. 299; Cropper v. man, 73 Tex. 395, 11 S. W. 390, affd. 

Cook, L. R. 3 C. P. 194; MoUett v. 138 U. S. 285, 34 L. ed. 962, 11 Sup. 

Robinson, L. R. 5 C. P. 646, L. R. Ct. 298. See also, Buyck v. Schwing, 

7 C. P. 84; Randall v. Kehler, 60 100 Ala. 355, 14 So. 48; Knowles v. 

Maine 37, 11 Am. Rep. 169; Pinkham Dow, 22 N. H. 387, 55 Am. Dec. 

V. Crocker, 77 Maine 563, 1 Atl. 827 ; 163 ; Walls v. Bailey, 49 N. Y. 464, 

Dwight V. Whitney, 15 Pick. (Mass.) 10 Am. Rep. 407; Barnard v. Kel- 

179; Upton v. Suffolk County Mills, logg, 10 Wall. (U. S.) 383, 19 L. 

11 Cush. (Mass.) 586, 59 Am. Dec. ed. 987. 
163; James v. McCredie, 1 Bay (S. 
Car.) 294, 1 Am. Dec. 617. 



89 FACTORS AND BROKERS. § 2903 

bound to third persons relying thereon in good faith by the acts of 
the agent in accordance with such usage or custom." 

§ 2903. Implied and particular authority of factors. — 

Factors and brokers usually have a number of implied powers, 
even where authority over some particular matter is expressly 
given. Some of the most common or important of those gener- 
ally implied or arising in particular cases with reference to factors 
will be considered in this section. As it is a factor's business to 
sell, all the powers properly incident thereto are necessarily im- 
plied." He has implied authority to insure the goods consigned 
to him ;" and it has been held that he may employ counsel to de- 
fend any suits that may be brought against him concerning the 
goods consigned to him, that his principal is bound to reimburse 
him for the expenses incurred,^^ that where the factor is employed 
to sell the goods of a manufacturing company and to buy stock 
he has power to buy on credit, but not to give the note of the 
corporation,^* and that he may give bond when necessary to carry 
out the instructions of the principal. ^° But, on the other hand, it 
has been held that a factor has no authority to compromise a suit,^° 
submit a claim to arbitration," nor to sell a debt due his principal 
in order to reimburse himself for advances."^ He has no im- 

"Heyworth v. Knight, 17 C. B. eral usage and custom of the busi- 

(N. S.) 298; Bailey v. Bensley, 87 ness and market. Potter v. Morland, 

111. 556; Union Stockyard &c. Co. 3 Cush. (Mass.) 384; Davis v. Kobe, 

V. Mallory &c. Co., 157 111. 554, 41 36 Minn. 214, 30 N. W. 662, 1 Am. 

N. E. 888, 48 Am. St. 341 ; Rosen- St. 663. See also, Bibb v. Allen, 149 

stock V. Lormey, 32 Md. 169, 3 Am. U. S. 481, Z1 L. ed. 819, 13 Sup. 

Rep. 125; Sleght v. Hartshorne, 2 Ct. 950. 

Johns. (N. y.) 531; Morey v. Webb, "Shoenfeld v. Fleisher, IZ 111. 404; 

65 Barb. (N. Y.) 22, affd. 58 N. Y. De Forest v. Fulton Fire Ins. Co., 

350; Blin v. Mayo, 10 Vt. 56, 33 Am. 1 Hall (N. Y.) 84. 

Dec. 175. See also, McCarthy v. "Monnet v. Merz, 127 N. Y. 151, 

Crawford, 238 111. 38, 86 N. E. 750, 27 N. E. 827. 

29 L. R. A. (N. S.) 252, 128 Am. " Emerson v. Providence Mfg. Co., 

St. 95n (owner held estopped). Fact- 12 Mass. 237, 7 Am. Dec. 66. 

or's authority is governed by the law "Hardee v. Hall, 12 Bush (Ky.) 

of the place where the sale or con- 327. 

tract of disposition is made by him. "" See Monnett v. Merz, 127 N. Y. 

Frank v. Jenkins, 22 Ohio St. 597; 151, 27 N. E. 827; Greenleaf v. 

Herbert v. Neill, 49 Tex. 143. Moody, 13 Allen (Mass.) 363. 

"Dows V. McCleary, 14 111. App. '^Carnochan v. Gould, 1 Bailey (S. 

137 ; Grieff V. Cowguill, 2 Disn. (Ohio) Car.) 179, 19 Am. Dec. 668. 

58, 13 Ohio Dec. 37. He generally '"Commercial Nat. Bank v. Heil- 

has implied authority to transact the bronner, 108 N. Y. 439, 15 N. E. 

business in accordance with the gen- 701. 



§ 2903 



AGENCY. 



90 



plied authority, ordinarily at least, to sell property not in his pos- 
session.^'' Neither does the power to sell, under common-law rules, 
include the power to barter or exchange the property for other 
goods.^* Nor has the factor any power at common law to pledge 
such property except, perhaps, to the extent of his lien for com- 
pensation, advances, or the like.'^ But there are some qualifica- 
tions of this rule, and factors' acts or other statutes have greatly 
modified it in many jurisdictions. ^"^ Unless the factor has in- 
structions to the contrary, or the usage of trade is otherwise, he 
may sell his principal's goods on a reasonable credit;" but in 
such case it is the duty of the broker to use due care in selling to 
responsible parties and making collections. He has also the im- 
plied authority to warrant the condition and quality of the goods 
sold by him,"" but not, ordinarily, to warrant the goods as to 
future conditions.^' He may also receive payment for goods 
sold.''** But a factor, like any other agent, is generally prohibited 



^'Harbert v. Neill, 49 Tex. 143. 
And where a factor has learned that 
the property intrusted to him for 
sale has been sold by his principal, 
it is held that his authority to sell the 
same is revoked, and he cannot sell 
the property even to the extent of 
satisfying his lien for advances or 
for liabilities incurred by him in the 
attempt to sell such property, unless 
the sale becomes necessary to pro- 
tect his interest. Walker v. Dubuque 
Fruit &c. Co., 106 Iowa 24S, 16 N. 
W. 673. 

^Guerriero v. Peile, 3 B. & Aid. 
616; Haas v. Damon, 9 Iowa 589; 
Trudo V. Anderson, 10 Mich. 357, 81 
Am. Dec. 795; Kauffman v. Beas- 
lev, 54 Texas, 563; Victor Sewing 
Mach. Co. V. Heller, 44 Wis. 265. 

^Martini v. Coles. 1 M. & S. 140; 
Pickering v. Busk, 15 East 38); Com- 
mercial Bank v. Lee, 99 Ala. 493, 12 
So. 572, 19 L. R. A. 70S; National 
Exch. Bank v. Graniteville Mfg. Co., 
79 Ga. 22, 3 S. E. 411; Merchants' 
Nat. Bank v. Pope, 19 Ore. 35, 26 
Pac. 622; Mechanics' &c. Ins. Co. v. 
Kiger, rZ U. S. 352, 26 L. ed. 433; 
Allen V. St. Louis Nat. Bank, 120 
U. S. 20, 30 L. ed. 573, 7 Sup. Ct. 
460. 

^See 12 Am. & Eng. Encv. L. 
(2d ed.), Tit. "Factors' Acts''; Evans 



v. Potter, 2 Gall. (U. S.) 12, Fed. 
Cas. No. 4569 (Usage may justify 
pledge to secure money to pay 
duties.). 

" Scott V. Surman, Willes 400 ; Al- 
sop v. Silvester, 1 C. & P. 107; Bur- 
ton V. Goodspeed, 69 111. 237; Walker 
Co. V. Dubuque Fruit &c. Co., 106 
Iowa 245. 76 N. W. 673; Roosevelt 
V. Doherty, 129 Mass. 301, 37 Am. 
Rep. 356!; Daylight Burner Co. v. 
Odlin, 51 N. H. 56, 12 Am. Rep. 
45. 

"^ Brooks V. Hassall, 49 L. T. (N. 
S.) 569; Flash v. American Glucose 
Co., 38 La. Ann. 4 ; Nelson v. Cow- 
ing, 6 Hill (N. Y.) 336; Schuhardt 
V. Aliens, 1 Wall. (U. S.) 359. 

^ Upton v. Suffolk County Mills, 
11 Cush. (Mass.) 586, 59 Am. Dec. 
163. See also, Palmer v. Hatch, 46 
Mo. 585. 

»° Pickering v. Busk, 15 East 38; 
Adams v. Eraser, 82 Fed. 211, 27 C. 
C. A. 108 ; Kane v. Barstow, 42 Kans. 
465, 22 Pac. 588, 16 Am. St. 490; 
Graham v. Duckwall, 8 Bush (Ky.) 
12; Butler v. Dorman, 68 Mo. 298, 
30 Am. Rep. 795; Corlies v. Gum- 
ming, 6 Cow. (N. Y.) 181. See also, 
Coates V. Lewes, 1 Campb. 444; 
Traub v. Milliken, 57 Maine 63, 2 
Am. Rep. 14. 



91 



FACTORS AND BROKERS. 



§ 2904 



from delegating his authority to another or others, and is required 
to act in person ;" yet, as in other cases of agency, mere ministe- 
rial and clerical duties may be redelegated,^^ and the usages of 
trade or commerce frequently authorize the employment of sub- 
agents,^^ 

§ 2904. Implied and particular authority of brokers. — 

As a general rule, whatever is necessary to effect the purpose of 
the employment is within the implied authority or powers of a 
broker,^* as well as of a factor. One of such implied powers, in 
a proper case, is the power or authority to sign "bought and sold 
notes."^' It has also been held that a loan broker has implied 
authority to agree for his principal that "full brief of title and 
searches, with opinion of counsel, will be required."^^ But 
whether a real estate agent or broker under authority to sell cer- 
tain real estate and upon certain terms has power to agree for 
his principal to convey the property is a disputed question. It is 
held in a number of cases that he has such power,^' but where 



''Catlin V. Bell, 4 Campb. 183; 
Terry v. Bamberger, 44 Conn. 558, 14 
Blatchf. (U. S.) 234, Fed. Cas. No. 
13837, affd. 103 U. S. 40, 26 L. ed. 
317; Sparks v. Flannery, 104 Ga. 323, 
30 S. E. 823; McMorris v. Simpson, 
21 Wend. (N. Y.) 610; Kauffman v. 
Beasley, 54 Tex. 563; Warner v. 
Martin, 11 How. (U. S.) 209, 13 
L. ed. 667. But see Harralson v. 
Stein, 50 Ala. 347; Bound v. Simkins 
(Tex. Civ. App.), 151 S. W. 572. 

^'^ McMorris v. Simpson, 21 Wend. 
(N. Y.) 610. 

"^Trueman v. Loder, 11 Ad. & E. 
589; Terry v. Bamberger, 44 Conn. 
558, 14 Blatchf. (U. S.) 234, Fed. 
Cas. No. 13837, aiTd. 103 U. S. 40, 
26 L. ed. 317; Strong v. Stewart, 9 
Heisk. (Tenn.) 137; Warner v. Mar- 
tin, 11 How. (U. S.) 209, 13 L. ed. 
667. See also. Darling v. Stanwood, 
14 Allen (Mass.) 504. 

"McBean v. Fox, 1 111. App. 177; 
Boorman v. Jenkins, 12 Wend. (N. 
Y.) 566, 27 Am. Dec. 158. And he 
generally has implied authority to 
deal with the matter according to 
the lawful custom and general usages 
of the business. Hansen v. Boyd, 161 
U. S. 397, 40 L. ed. 746, 16 Sup. Ct. 



571. See also, as to following cus- 
tom as to margins and right to close 
out the deal. Van Dusen-Harrington 
Co. V. Jungeblut, 75 Minn. 298, 11 N. 
W. 970, 74 Am. St. 463 and note. 

^Parton v. Crofts, 16 C. B. (N. 
S.) 11; Saladin v. Mitchell, 45 111. 
79. See as to what are such notes, 
Wharton Agency, § 719t;Benj. Sales 
(6th ed.), § 276. And as to evidence 
and variance, see Sievewright v. 
Archibald, 20 L. J. Q. B. 529, 17 
Q. B. 103; Hawes v. Forster, 1 Mood. 
& Rob. 368; Bulters v. Glass, 31 U. 
C. Q. B. 379; Phippen v. Hyland, 19 
U. C. C. P. 416. See also, Davis 
V. Shields, 26 Wend. (N. Y.) 341; 4 
Am. & Eng. Ency. L. (2d ed.) 751, 
et seq. 

»«Middleton v. Thompson, 163 Pa. 
St. 112, 29 Atl. 796. 

"Peterson v. O'Connor, 106 Minn. 
470, 119 N. W. 243, 130 Am. St. 618; 
Jackson v. Badger, 35 Minn. 52. 26 
N. W. 908; Schultz v. Griffin, 121 N. 
Y. 294, 24 N. E. 480, 18 Am. St. 
825. But compare Lindlay. v. Keine, 
54 N. J. Eq. 418, 34 Atl. 1073; Hal- 
sev V. Monteiro, 92 Va. 581, 24 S. E. 
258; note in 93 Am. Dec. 172. 



8 2904 AGENCY. 92 

a broker is employed merely to find a purchaser it is generally held 
that the broker has no authority to execute a contract of sale.^' 
A broker ordinarily has no authority to receive payment, not 
having the goods in his possession f " and this is true if he sells by 
sample.*" So, a broker, unlike a factor in most cases, has no im- 
plied povi^er to sell on credit.*^ Nor has he or a factor any right 
as a rule to delegate his authority to a subagent ;*^ but this rule 
does not apply to mere ministerial acts in a proper case, and it 
may be affected by usage.*' A broker cannot, as a general rule, 
act for both parties to a sale, where there is a conflict of interest 
such as there usually is between the purchaser and seller of prop- 
erty;** but if the injured principal, with a full knowledge of all 
the facts, subsequently ratifies the transaction, the contract is 
binding on him. In regard to matters in which their interests 
are not antagonistic, such as making the memorandum of sale, 
or the like, the broker may lawfully represent both parties;*^ and 
certainly he may do so if both principals have knowledge of the 
fact that he is acting for both and make no objections.*" So, 
after he has brought the parties together, his employment gen- 

=* Duffy V. Hobson, 40 Cal. 240, 6 "Wiltshire v. Sims, 1 Campb. 256; 

Am. Rep, 617; McCullough v. Hitch- Illinois v. Delafield, 8 Paige (N. Y.) 

cock, 71 Conn. 401, 42 Atl. 81 ; Camp- 527, affd. 26 Wend, 192. 

bell V. Galloway, 148 Ind, 440, 47 "Cockran v. Irlam, 2 Maule & S. 

N, E. 818; Balkema v. Searle, 116 301; Henderson v. Barnewall, 1 

Iowa 374, 89 N. W. 1087; Larson v. Younge & J, 387; note in SO Am. St. 

O'Hara, 98 Minn. 71, 107 N, W. 821, 110. 

116 Am, St. 342, See also, Hamer " Rosenstoch v, Tormey, 32 Md. 
V. Sharp, L. R, 19 Eq. 108 ; Chad- 169, 3 Am. Rep. 125 ; Gheen v. John- 
burn V. Moore, 61 L. J. Ch. 674; son, 90 Pa. St. 38, 
McFarland v, Lillard, 2 Ind, App, "Farnsworth v, Hemmer, 1 Allen 
160, 28 N. E. 229, SO Am, St. 234; (Mass.) 494, 79 Am, Dec, 756; 
Everman v, Herndon, 71 :\Iiss. 823, Marsh v, Buchan, 46 N, J. Eq. 595, 22 
15 So, 135- Brandrup v. Britten, 11 Atl, 128; Borie v. Satterthwaite, 12 
N, Dak. 376, 92 N. W. 453; Dela- Montg, Co. L. R. (Pa.) 194, affd. 180 
field V. Smith, 101 Wis. 664, 78 N. Pa, 542, 2,1 Atl, 102. 
W, 170, 70 Am, St. 938. "Story Ag, (9th ed,), § 31; Galgate 

=' Story Ag. (9th ed,), § 109; Hig- Ship, Co, v. Starr, 58 Fed, 894, revd. 
gins V, Moore, 34 N. Y. 417. Hence a 68 Fed, 234, 15 C. C. A. 366, Where 
payment to a broker will not release a memorandum is required by the 
from liability the party who pays statute of frauds, the brokers entry 
to him, Wharton Ag,, §'714; Crosby of the sale is sufficient to satisfy the 
V, Hill, 39 Ohio St. 100. See also, statute, and is binding on both par- 
Law V. Stokes, 32 N. J. L, 249, 90 ties. Wharton Ag,, § 718. 
Am. Dec. 655, Compare Cropper v. "Alexander v. Northwestern Chris- 
Cook L R, 3 C, P, 194. tian University, 57 Ind. 466, See also, 

" Butler V. Dorman, 68 Mo. 298, 30 note to McClure v. Luke, 24 L. R. A. 

Am. Rep, 795. (N. S.) 659. 



93 FACTORS AND BROKERS. § 2905 

erally ends, and he may then act for either or both principals.*'' 
It is also a general rule that a broker who is employed to sell 
cannot, without the principal's consent, purchase of himself.*' A 
broker, like any other agent, should contract in the name of his 
principal ; and if he contracts in his own name, without disclosing 
his principal, the third party may usually elect to hold the princi- 
pal when he discovers him.*° The authority of a broker may be 
revoked, as in other cases of agency; and the revocation may be 
implied from the circumstances, as from the employment of an- 
other broker and the accomplishment by the latter of the object 
of the employment.^" But where the authority is to sell within 
a certain time, the principal cannot revoke the authority sooner 
and escape liability, if the broker finds a purchaser within such 
time.^^ As shown in the next section, there are cases in which a 
principal who has acted in bad faith may be held for commission, 
notwithstanding he has attempted to revoke the broker's au- 
thority." 

§ 2905. Relation between principal and factor or broker — 
General obligations of factors and brokers to principal. — The 

relation between a factor or broker and his principal is such as to 
require the utmost good faith.*^^ This rule is most frequently 

"See Woods v. Rocchi, 32 La. ""Ahern v. Baker, 34 Minn. 98, 24 

Ann. 210. N. W. 341. See also, Cronin v. 

"Hughes V. Washington, 72 III. 84; American Securities Co., 163 Ala. 533, 

Taussig V. Hart, 58 N. Y. 425; Stew- 50 So. 915, 136 Am. St. 88; Cadigan 

art V. Mather, 32 Wis. 344. See also, v. Crabtree, 179 Mass. 474, 61 N. E. 

Curry v. King, 6 Cal. App. 568, 92 i1, 55 L. R. A. 11, 88 Am. St. 397. 

Pac. 662; Rodman v. Manning, 53 But compare Branch v. Moore, 84 

Ore. Zie, 99 Pac. 657, 20 L. R. A. Ark. 462, 105 S. W. 1178, 120 Am. 

(N. S.) 1158, and note; McCallum St. 78. 

V. Grier 86 S. Car. 162, 68 S. E. "Blumenthal v. Goodall, 89 Cal. 

466, 138 Am. St. 1037. But see as 251, 26 Pac. 906, ■w 

to subsequent purchase by agent : "^^ See last note to next following 

Robertson v. Chapman, 152 U. S. 673, section ; also Anderson v. Crow (Tex. 

38 L. ed. 592, 14 Sup. Ct. 741; Ober- Civ. App.), 151 S. W. 1080. 

lin College v, Blair, 45 W. Va. 812, =' Babcock v. Orbison, 25 Ind. 75; 

32 S. E. 203. And compare, also, Campbell v. Baxter, 41 Nebr. 729, 60 

where the facts are disclosed and N. W. 90, and cases there reviewed ; 

the principal knowingly deals with Marsh v. Buchan, 46 N. J. Eq. 595, 

the agent, Pomeroy v. Wimer, 167 22 Atl. 128; Govan v. Gushing, 111 

Ind. 440, 78 N. E. 233, 79 N. E. 446; N. Car. 458, 16 S. E. 619; Jennings 

Rathke v. Tyler, 136 Iowa 284, 111 v. Trummer, 52 Ore. 149, 96 Pac. 874, 

N. W. 435. 23 L. R. A. (N. S.) 169, 132 Am. St. 

'^ Graham v. Duckwall, 8 Bush 680 (on part of principal as well as 

(Ky.) 12. See also, Haas v. Ruston, broker) ; Rice v. Davis. 136 Pa. St. 

14 Ind. App. 8, 42 N. E. 298, 56 Am. 39, 20 Atl. 513. 20 Am. St. 931 ; Pratt 

St. 288; Beebe v. Robert, 12 Wend. v. Patterson, 112 Pa. St. 475, 3 Atl. 

(N. Y.) 413, 27 Am. Dec. 132. 858; Wadsworth v. Adams, 138 U. 



§ 2906 AGENCY. 94 

applied as against the agent/* but it also finds application as 
against the principal in a proper case." Thus, it is held that 
where the principal employs more than one broker to sell his 
property it is the duty of such principal to allow them to act in- 
dependently and to remain neutral as between them and between 
them and a purchaser ; and the vendor cannot escape liability for 
commission to the first broker by stepping in and completing the 
sale to a purchaser found by such broker, nor by giving the other 
broker the name of such prospective purchaser and aiding in di- 
verting the customer to such second broker.^" 

§ 2906. Duties and obligations of brokers and factors to 
principals. — It has already been shown that brokers and fac- 
tors must act in good faith toward their principals. So, it is 
their duty to obey instructions."' Thus, it has been held that 
where a broker has instructions to sell the principal's property at 
a certain price, and he sells for a less price, he will be liable to 
the principal for the difference f^ and when he is directed to sell 
for cash, he has no discretion to sell on credit. "^ But he is not an 
insurer of the success of the business in which he engages for his 

S 380, 34 L. ed. 984, 11 Sup. Ct. "Jennings v. Trummer, 52 Ore. 

303; note in 45 L. R. A. 3. 149, 96 Pac. 874, 23 L. R. A. (N. S.) 

'^See for examples, McKinley v. 164n, 132 Am. St. 680. And see to 

Williams, 74 Fed. 94, 20 C. C. A. same effect, Wood v. Wells, 103 

312; Salsbury v. Ware, 183 111. SOS, Mich. 320, 61 N. W. 503; McCor- 

56 N E 149- Love v. Hoss, 62 Ind. mack v. Henderson, 100 ?\Io. App. 

255- Wadsworth v. Jay, 118 :\Iass. 647, 75 S. W. 171; Gelatt v. Ridge, 

44; Bassett v. Rogers, 165 Mass. 277, 117 Mo. 553, 23 S. W. 882, 38 Am. 

43 'n E 180- Tilleny v. Wolverton, St. 683. See also, Fischer v. Bell, 

46 Minn. 256,'48 N. W. 908; Plotner 91 Ind. 243; Beale v. Creswell, 3 Md. 

V. Chillson, 21 Okla. 224, 95 Pac. 775, 196; Heaton v. Edwards (sub nom- 

129 Am. St. 776; cases cited in last ine Richardson), 90 ^lich. 500, 51 N. 

preceding note. See also, note in W. 544. 

45 L. R. A. 33, reviewing many other " Edwards on Factors and Brokers, 

authorities ■ Carter v. Owens, 58 Fla. § 16 et seq. ; Stearine Co. v. Heintz- 

204, 50 So. 641, 25 L, R. A. (N. S.) mann, 17 C. B. (N. S.) 56, 112 E. C. 

736, and note. L. 55 ; Clark v. Gumming, 77 Ga. 64, 

°^'See cases cited in next follow- 4 Am. St. 72; Courcier v. Ritter, 4 

in? note Also, Dobinson v. Mc- Wash. (U. S.) 549. Fed. Gas. No. 

Donald, 92 Gal, 33, 27 Pac. 1098; 3282; Galjgher v, Jones, 129 U. S. 

Howe V. Werner, 7 Colo. App. 530, 193, 32 L. ed. 658, 9 Sup. St. 335. 

44 Pac. 511; Davis v. Gasette, 30 111. °' See Dufresne v. Hutchinson, 3 

Add 41 • Woodall v. Foster, 91 Tenn. Taunt. 117, Taylor v. Ketchum, 35 

195 18' S W. 241; Elmendorf v. How. Pr. (N. Y.) 289, 28 N. Y. 

Golden 37 Wash. 664, 80 Pac. 264; Super. Gt. 507. 

Bowe V Gage 127 Wis. 245, 106 N. ""Boorman v. Brown. 3 A. & E. 

W 1074 lis Am. St. 1010; note in (N. S.) 511, 43 E, G. L. 843. 
43 L. R.' A. 593. 



95 FACTORS AND BROKERS. § 2906 

principal; if he follows the directions of the principal bona fide, 
this is all he is usually required to do, and he is not liable for any 
loss that may follow therefrom."" So, a factor is required to ren- 
der implicit obedience to the instructions of his principal ;°^ but 
he is not in duty bound to follow directions which require him to 
go outside of the scope of his employment, and he is not liable to 
the principal if he properly refuses to do so."^ If injury results 
from the obedience it is the principal's loss and not his. He must 
obey if he can do so f^ but he is only required to use reasonable 
diligence, and if by so doing he is unable to comply, he will be ex- 
onerated. °* It is also the duty of brokers"^ and factors'" to exer- 
cise reasonable skill, care and diligence in the transaction of the 
business. They must duly account to their principal." The 
duty of a factor to account includes the remitting of proceeds 
of sales when requested;"^ but it is held that he need not remit 
until demand is made."^ It is usually the duty of a factor to 
inform the principal of everything which it is proper for the prin- 
cipal to know relating to the business intrusted to him, and a fail- 
ure to do so may render the factor liable in damages.''" Thus, 

'"Matthews v. Fuller, 123 Mass. low v. Bastlett, 170 Mass. 584, 49 

446 N. E. 1014. 

''Larminie v. Carley, 114 111. 196, *» Atkinson v. Burton, 4 Bush (Ky.) 

29 N. E. 382 ; Rollins v. Duffy, 18 111. 299 ; Eaton v. Welton, 32 N. H. 352 ; 

App 398- Maggoffin v. Cowan, 11 Milbank v. Dennistown, 10 Bosw. (N. 

La. Ann. 554; Maynard v. Pease, 99 Y.) 382. See also, Foster v. Bush, 

Mass. 555; Rundle v. Moore, 3 104 Ala. 662, 16 So. 625; Vincent v. 

Johns. Cas. (N. Y.) 36; Hilton v. Rather, 31 Tex. 77, 98 Am.. Dec. 516. 

Vanderbilt, 82 N. Y. 591; Wilkinson But he is not an insurer. Dunbar v. 

V. Campbell, 1 Bay (S. Car.) 169; Gregg, 44 111. App. 527. See also, 

Strong V. Stewart, 9 Heisk. (Tenn.) Adams v. Capron, 21 Md. 186, 83 Am. 

137; George Campbell Co. v. Angus, Dec. 566. 

91 Va 438 22 S. E. 167. °' Merryman v. David, 31 111. 404; 

"'Thompson v. Woodruff, 7 Coldw. Fish v. Seeberger, 154 111. 30, 39 N. 

(Tenn.) 401; See also, where there E. 982; Kerfoot v. Hyman, 52 111. 

is an unforeseen emergency, Judson 512; Bassett v. Rogers, 165 Mass. 

V Sturges, S Day (Conn.) 556; 377, 43 N. E. 180; Stearns v. Hoch- 
Drummond v. Wood, 2 Caines (N. brunn, 24 Wash. 206, 64 Pac. 165. 

Y ) 310 • Forestier v. Bordraan, 1 °' See Ferris v. Pans, 10 Johns. (N. 
Storv (U S) 43, Fed. Cas. No. Y.) 285; Middleton v. Twombly, 125 
4945 N. Y. 520, 26 N. E. 621; Cooley v. 

"'Evans v. Root, 7 N. Y. 186, 57 Betts, 24 Wend. (N. Y.) 203. 

Am Dec. 512. "^ Johnson v. Martin, 11 La. Ann. 

"'be Tastett v. Crousillat, 2 Wash. 27, 66 Am. Dec. 193. 

(U S ) 132, Fed. Cas. No. 3828. ™ Callander v. Oelri'chs, 5 Bing. N. 

" Boorman v. Brown, 3 Ad. & El. Cas. 58, 35 E. C. L. 41 ; Howe v. Suth- 

(N S) 511 43 E. C. L. 843; Stew- erland. 39 Iowa 484; DeTastett v. 

art V Muse 62 Ind. 385; Price v. Crousillat, 2 Wash. (U.S.) 132, Fed. 

Keyes, 62 N. Y. 378. See also, Har- Cas. No. 3828. 



§ 2907 AGENCY. 96 

where goods are sold by a factor on credit, and the purchaser sub- 
sequently becomes insolvent, it is the duty of the factor, if he have 
information of such insolvency, to notify the principal thereof 
within a reasonable time." So, where it was the duty of a factor 
to insure, and he was unable to do so for some reason, it was held 
to be his duty to notify the principal of his inability, and that a 
failure to do so would make the factor liable in damages." It 
is his duty to keep the goods of his principal separate from his 
own and those of other owners ;" but by usage or custom he may 
be justified in storing them with other goods of the same grade.'* 
He is not required, as a general rule, to insure goods that have 
been consigned to him ;" but when he is instructed and intrusted 
to do so he will be liable if he fails to do it and there is a loss.'" 
So, where it is the known custom or habit of a factor to insure, or 
usage requires it, the factor will usually be liable for any loss 
that may occur by reason of his failure to effect such insurance 
as should reasonably protect the property." 

§ 2907. Rights and remedies of broker as against princi- 
pal — Compensation — Real estate brokers. — A broker's com- 
pensation is usually made by way of commissions, that is, by a 
percentage on each dollar's worth of property sold or purchased 
by him for the principal. If the contract specifies the amount or 
rate of compensation the broker is to receive, the amount will be 
thus determined. If the compensation is not thus fixed, and the 
services have been fully performed, the broker will be entitled 
to reasonable compensation, or, generally, to such compensation as 
the usages of the business in the particular community entitle 
him to receive under the particular circumstances.'^ Even where 
the contract is express, its construction is not always free from 

" Forrestier v. Bordman, 1 Story Shoenfeld v. Fleisher, T3 111. 404 

(U. S.) 43, Fed. Cas. No. 494S. Gordan v. Wright, 29 La. Ann. 812, 

'- DeTastett v. Crousillat, 2 Wash. " Shoenfeld v. Fleisher, 7i 111. 404 

(U. S.) 132, Fed. Cas. No. 3828. Burbridge v. Gumbel. 72 Miss. 370 

"Clarke v; Tipping, 9 Beav. 284. Lee v. Adsit, 27 N. Y. 78. See also, 

" Davis V. Kobe, 36 Minn. 214, 30 Smith v. Lascelles, 2 T. R. 187 ; Area 

N. W. 662, 1 Am. St. 663. v. Milliken, 35 La. Ann. 1150; 

''Wal'^h V. Frank, 19 Ark. 270; Kingston v. Wilson, 4 Wash. (U. S.) 

Shoenfeld v. Fleisher. 73 111. 404; 310, Fed. Cas. No. 7823. 

Duncan v. Boye, 17 La. Ann. 273 ; " Scully v. Williamson, 26 Okla. 19, 

Lee V. Adsit, 37 N. Y. 78. 108 Pac. 395, Ann. Cas. 1912A. 1265, 

"* Smith V. Lascelles, 2 T. R. 187; and note. 



97 FACTORS AND BROKERS, § 2907 

difficulty.''" If the right to receive commissions is qualified, by 
providing that no commissions shall be paid if the property be 
"sold to a party sent by" the principal or a person named, or if the 
time within vi^hich sales to such persons might be made be limited, 
the broker may or may not be entitled to commissions, depend- 
ing on w^hether or not the conditions have been fulfilled.*" 

There are many decisions upon the general subject, especially 
as to real estate agents. Commissions are usually payable when- 
ever the broker has produced a party who is ready, willing and 
able to buy or sell on the terms fixed, as the case may be;*^ 
and unless the contract otherwise provides, it is not essential 
that the sale should have been actually made, if the broker 
has done his part.*^ Where a building-lot that had been 
placed with a broker for sale was withdrawn from market, 
after it had been sold by the broker, but he was laboring un- 
der the erroneous belief that the lot to be withdrawn was 
not the one sold, it was held that he was entitled to his 
commission.*^ A subsequent agreement that no commission 
is to be paid unless a deed is executed has been held to be 
without consideration, and not enforcible against the broker.** 
A broker is also entitled, in a proper case, to be reimbursed 
by his principal for any expenses, losses or outlays on account 
of the business he was employed to transact, such as expenses 

"Walker Mfg. Co. v. Knox, 136 593. See also, Heimberger v. Rudd 

Fed. 334, 66 C. C. A. 160; Caston v. (S. Dak.), 138 N. W. 374. But see 

Quimby, 176 Mass. 153, 59 N. E. 653, Mattingly v. Pennie, 105 Cal. 514, 39 

52 L. R. A. 785i; Jacobson v. Rotzien, Pac. 200, 45 Am. St. 87. See also, 

111 Minn. 527, 127 N. W. 419, 856. See Jones v. Ford (Iowa), 134 N. W. 569, 
Jones V. Buck, (Iowa), 120 N. W. 38 L. R. A. (N. S.) W, and note. 

112 " See cases in last note. Also, 
'°Gaty V. Clark, 28 Mo. App. 332. Scully v. Williamson, 26 Okla. 19, 

See also. West v. Hudson, (Mich.) 108 Pac. 395, Ann. Cas. 1912A. 1265. 

137 N. W. 668. But the particular contract may be 

" Oullahan v. Baldwin, 100 Cal. 648, such as to require a completed sale. 

35 Pac. 310; Rape V. Wright, 116 Ind. Warnekros v. Bowman (Ariz.), 128 

502, 19 N. E. 459; McFarknd v. Lil- Pac. 49; Nagle v. Small (Iowa), 138 

lard, 2 Ind. App. 160, 28 N. E. 229, N. W. 849. 

SO Am. St. 234; Telford v. Brinker- '' Sayre v. Wilson, 86 Ala. 151, 5 

hoff, 45 111. App. 586 ; Gelatt v. Ridge, So. 157. 

117 Mo. 553, 23 S. W. 882, 38 Am. St. ^ Moskowitz v. Hornberger, 15 
683 and note; Cheatham v. Yar- Misc. 645, 74 N. Y. St. 567, 38 N 
brough, 90 Tenn. 11, 15 S. W. 1076. Y. S. 114; McComb v. VonEllert, 7 
Many authorities to the same effect Misc. 59, 57 N, Y. St. 501, 27 N. Y. 
are cited and reviewed in the note S. 372. But the contract m the be- 
to Lunney v. Healey, 44 L. R. A. ginning may require this. Morse v. 

Conley (N. J.), 85 Atl. 196; Heath 

7 — Contracts, Vol. 4 



§ 2907 AGENCY. 98 

and services in bringing the property to market, and the like ;'° 
but this is usually true only if he effects a sale or purchase, as the 
case may be;*" and he cannot recover compensation if he was 
guilty of such negligence as rendered his services worthless." 
Where, however, a broker acts without or in excess of authority, 
he is not entitled to recover commissions, ordinarily at least, un- 
less the act be subsequently ratified."^ Although brokers are usu- 
ally paid commissions, as already explained, it has been held that 
while one who renders services in assisting a broker in bringing 
about a sale may recover compensation for the services, it is not 
by way of commissions. *** When the broker, or his agent, noti- 
fies the principal of the broker's inability to perform the service 
for which he was employed, there is an abandonment of the con- 
tract, and the principal will not be liable for the services.^" This 
is so held even where the principal afterward sells the property to 
the person who was introduced by the broker to him."^ So, the 
mere fact that the owner of the property has employed a broker 
to sell it will not prevent such owner from negotiating the sale 
himself, nor prevent him from placing the property for sale in 
another agency, in the absence of some contract provision to that 
effect, and in case of sale by the owner, acting in good faith and 
without the assistance of such broker, and before any sale by the 
latter, the owner is not liable for commissions."^ 

V. Huffhines (Tex. Civ. App.), 152 v. Fuqua, 102 Tex. 430, 118 S. W. 

S W 176 132, 132 Am. St. 892; Schultz v. 

'«=Sentance v. Hawley, 13 C. B. (N. Christopher, 65 Wash. 496, 118 Pac. 

S.) 458, 106 E. C. L. 458; Bennett 629, 38 L. R. A. (N. S.) 780, and 

V. Covington, 22 Fed. 816; Wisehart note. 

V Deitz 67 Iowa 121, 24 N. W. 752 ; '° Hawkins v. Chandler, 8 Houst. 
Chilton V. Butler, 1 E. D. Smith, (N. (Del.) 434, 32 Atl. 464. 

Y ) 150 ■ Esser v. Lindermann, 71 Pa. °° Jackson v. Parnsh, 157 Ala. 584, 
St 76- Vincent v. Woodland Oil Co., 47 So. 1014; Everett v. Farrell, 11 
165 Pa. St. 402, 30 Atl. 991. See Ind. App. 185, 38 N. E. 872. 

also, Quitzow v. Perrin, 120 Cal. 255, " Fairchild v. Cunnmgham, 84 

52 Pa? 632 Minn. 521, 88 N. W. 15; Bouscher 

"Didion V. Duralde, 2 Rob. (La.) v. Larkins, 84 Hun (N. Y.) 288, 65 

163. See also, McDonald v. Ortman, N. Y. St. 540, 32 N. Y. S. 305. See 

98 Mich 40 56 N. W. 1055 ; Thuner also, Chaffee v, Widman, 48 Colo. 34, 

v Kanter, 102 Mich. 59, 60 N. W. 108 Pac. 995, 139 Am. St. 220. 

299. °'Do1an v. Scanlan, 57 Cal. 261; 

"^ Fisher V. Dynes, 62 Ind. 348. Waterman v. Boltinghouse, 82 Cai. 

"* Hansen v. Boyd, 161 U. S. 397, 659, 23 Pac. 195 ; Doonan v. Ives, 73 

40 L, ed. 746, 16 Sup. Ct. 571. As Ga. 295; Stewart v. Murray, 92 Ind. 

to ratification, see generally, Smith v. 543, 47 Am. Rep. 167; Vandyke v. 

Schiele, 93 Cal. 144, 28 Pac. 857; Walker, 49 Mo. App. 381. Compare 

Nesbitt V. Helser, 49 Mo. 383 ; Evants also. Seevers v. Cleveland Coal Co. 



99 



FACTORS AND BROKERS. 



2907 



A real estate broker is not entitled to compensation from either 
party when, without their consent or knowledge, he undertakes to 
represent two principals adversely interested."' But it has been 
held that where such a broker has a farm for sale for one principal, 
and is employed by another to effect an exchange of city property 
for the farm, and he brings the owners together, who make an ex- 
change, there being no fraud on his part, he is entitled to collect 
compensation also from the party who employed him to make the 
exchange."* The rule against double agency of this kind does 
not apply when the parties consent thereto. "° So, there are many 
cases in which he acts as a mere middleman to bring the par- 
ties together that are not within the rule."° A broker does not 
comply with the terms of his employment to sell his principal's 
real estate by becoming the purchaser himself nor by selling to a 
syndicate of which he is a member; and he is not entitled to com- 
missions in such case, in the absence of an agreement, with full 
knowledge of his interest, to pay such commissions."' But where 



(Iowa), 138 N. W. 793. See, how- 
ever, as to special contracts and also 
as to right of agent ordinarily to 
have reasonable time, and as to when 
agency may or may not be with- 
drawn, the elaborate note to Hoadley 
V. Sav. Bank, 44 L. R. A. 321. Also 
note in 139 Am. St. 229-231. And as 
to revocation generally, see Cloe v. 
Rogers, 31 Okla. 255, 121 Pac. 201, 
38 L. R. A. (N. S.) 366. 

"^Deutsch V. Baxter, 9 Colo. App. 
58, 47 Pac. 405 ; Chapman v. Currie, 
51 Mo. App. 40; Strawbridge v. Swan, 
43 Nebr. 781, 62 N. W. 199; Bell v. 
McConnell, 2,1 Ohio St. 396, 41 Am. 
Rep. 528; Cannell v. Smith, 142 Pa. 
St. 25, 21 Atl. 793, 12 L. R. A. 395. 
Many other authorities are cited and 
reviewed in the note to Leathers v. 
Caniield, 45 L. R. A. 33, 44-48. 

■" Cox V. Haun, 127 Ind. 325, 26 N. 
E. 822. See also, Schwartze v. 
Yearly, 31 Md. 270; Campbell v. 
Yager, 32 Nebr. 266, 49 N. W. 181 ; 
Runnion v. Morrison (W. Va.), 16 
S. E. 457. 

"'Mitchell V. Duke, 134 Fed. 999; 
Alexander v. Northwestern Christian 
University, 57 Ind. 466; Adams Min. 
Co. V. Senter, 26 Mich. IZ; Wasser 



V. Western Land Securities Co., 97 
Minn. 460, 107 N. W. 160; Robin- 
son V. Jarvis, 25 Mo. App. 421 ; note 
in 45 L. R. A. 48; note in 24 L. R. 
A. (N. S.) 659, 660. See also, 
Featherston v. Trone, 82 Ark. 381, 
102 S. W. 196; Zimmerman v. Gar- 
vey, 81 Conn. 570, 71 Atl. 780; Red- 
mond V. Henke, 137 Iowa 228, 114 N. 
W. 885, and other recent cases cited 
in note last above referred to. 

"o Clark v. Allen, 125 Cal. 276, 57 
Pac. 985; McLure v. Luke, 154 Fed. 

647, 84 C. C. A. 1, 24 L. R. A. (N. 
S.) 659, and note; Alexander v. 
Northwestern &c. University, 57 Ind. 
466; Rupp v. Sampson, 16 Gray 
(Mass.) 398, 11 Am. Dec. 416; Mon- 
tross V. Eddy, 94 Mich. 100, S3 N. W. 
916, 34 Am. St. 323; Duryee v. Lester, 
75 N. Y. 442; Knauss v. Gottfried 
Krueger Brew. Co., 142 N. Y. 70, 36 
N. E. 867; Bell v. McConnell, i1 
Ohio St. 396, 41 Am. Rep. 528. See 
also, Hooper v. California, 155 U. S. 

648, 39 L. ed. 297, 15 Sup. Ct. 207; 
note in 45 L. R. A. 51. 

"Hammond v. Bookwalter, 12 Ind. 
App. 177, 39 N. E. 872; Humphrey 
V. Eddy Transp. Co., 107 Mich. 163, 
65 N. W. 13; Christianson v. Mille 



§ 2907 



AGENCY. 



100 



there was an agreement that the broker might himself become the 
purchaser, and the broker found a purchaser to whom the owner 
refused to convey, and the broker, taking a deed on his own 
option, conveyed to the purchaser, it was held that the broker was 
entitled to his commission."' The mere fact that a broker has 
contributed somewhat to a sale or purchase is not sufficient ; he 
must be the efficient or procuring cause of the same."" But he 
cannot be deprived of his commission, if he has introduced the 
purchaser to the seller and is thus the efficient cause of the sale, 
although the latter should make the sale himself, by voluntarily 
reducing the price of the property, or the like.^ 

A broker has the same remedies as other agents, by action, to 
enforce his right to compensation against the principal.^ So, if 
the fund or subject-matter of the agency is in his possession, the 
broker, besides these ordinary remedies, also has a lien on such 
fund or subject-matter of the agency, and he may retain his com- 
missions out of such fund.^ But brokers, having usually no pos- 



Lacs Land &c. Co., 113 Minn. 120, 
129 N. W. ISO, Ann. Cas, 1912A. 200 
and note. 

" Riemer v. Rice, 88 Wis. 16, 59 N. 
W. 450. 

""Zeimer v. Antisell, 75 Cal. 509, 
17 Pac. 642. See Chaffee v. Widman, 

48 Colo. 34, 108 Pac. 995, 139 Am. St. 
220, and elaborate note citing and re- 
viewing many authorities in support 
of the proposition stated in the text, 
and showing when the agent is re- 
garded as the efficient cause and when 
not. Hoadley v. Savings Bank, 71 
Conn. 599, 42 Atl. 667, 44 L. R. A. 
321; Piatt v. Johr, 9 Ind. App. 58, 
36 N. E. 294; Tombs v. Alexander, 
101 Mass. 255, 3 Am. Rep. 349; 
Whitcomb V. Bacon, 170 Mass. 479, 

49 N. E. 742, 64 Am. St. 317; Suss- 
dorff v. Schmidt, 55 N. Y, 319. 

^ Cook V. Forst, 116 Ala. 395, 22 So. 
540; Doonan v. Ives, 73 Ga. 295; 
Hafner v. Herron, 165 111. 242, 46 N. 
E. 211; Glasscock v. Vanfleet, 100 
Tenn. 603, 46 S. W. 449; ante, § 
2905, last note. See also, Heimberger v. 
Rudd (S. Dak.), 138 N. W. 374; note 
to Kalley v. Baker, 28 Am. St. 542, 
and note to Blackenridge v. Claridge, 
45 L. R. A. 592. But compare Carter 
V. Owens, 166 Fla. 204, 50 So. 641, 25 



L. R. A. (N. S.) 736. In Nation 
V. Harness, (Okla.) 126 Pac. 799, it 
is said that the great weight of au- 
thority is to the effect that where 
property is listed with several the 
agent who induces the seller and 
purchaser to enter into the contract 
is entitled to the commission though 
another agent may have first brought 
the parties together, citing numerous 
cases. See also, note to Jennings 
v. Trummer, 23 L. R. A. (N, S.) 164. 
'Lockwood v. Rose, 125 Ind. 588, 
25 N. E. 710; Wright v. Beach, 82 
Mich. 469, 46 N. W. 673. See also, 
Kupfrian Park Co. v. Runcie, (Ind. 
App.), 96 N. E. 626; Olcott v. Mc- 
Clure, (Ind. App.), 98 N. E. 82. 

= Vinton V. Baldwin, 95 Ind. 433; 
Barry v. Boninger, 46 Md. 59. An 
insurance broker, at common law, 
has a general lien on policies for 
any balance due him. He is usu- 
ally intrusted with the possession of 
policies so as to enable him to make 
adjustment of losses ; and if a policy 
thus in his possession was effected 
by him, he may retain it to secure 
any balance due him by his principal 
on their mutual accounts concerning 
the business. Wharton Ag., § 707. 



lOI FACTORS AND BROKERS. § 2908 

session of the property which they buy or sell for their principals, 
have no general lien, and can enforce a particular lien only when 
they do have possession of the property or thing on which it Is 
asserted.* 

§ 2908. Obligations of principal to factor — Lien of factor. 

— A factor, like a broker, is entitled to be compensated for his 
services and to be reimbursed for proper expenditures by his 
principal.^ "He may, however, forfeit his right to compensation 
and even to reimbursement, on account of his misconduct or negli- 
gence in the discharge of his duties." The principal is also liable 
to the factor for advances made by him to the principal. Ad- 
vances are moneys paid by the factor to his principal on the con- 
signment of goods, and in anticipation of the debt that will be- 
come due to the principal when the goods are sold ;' and these, it 
is held, are made both on the faith of the goods consigned to the 
factor and on the principal's personal credit.* The fact that the 
goods have been destroyed will not prevent the factor from recov- 
ering of the principal his advances."" It is also held in many of 

* Barry v. Boninger, 46 Md. 59. what similar statutes, Majors v. Ma- 
"Where a broker is intrusted with jors (Nebr.), 138 N. W. 574. 
possession of the property in re- °And in the absence of express 
spect to which he negotiates, thus contract a promise to pay the usual 
combining with his character as a reasonable and customary commission 
broker certain of the characteris- may be implied. TurnbuU v. Pom- 
tics of a factor, he is entitled to a eroy, 140 Mass. 117, 3 N. E. 15; 
lien upon such property, or on the Masterson v. Masterson, 121 Pa. St. 
proceeds thereof, if in his posses- 60S, 15 Atl. 652. See also, Albion 
sion, for his commission." Per Phosphate Min. Co. v. Wyllie, 11 Fed. 
Collins, J., in Peterson v. Hall, 61 541,. 23 C. C. A. 276. 
Minn. 268, 671 N. W. TiT,. A real es- " White v. Chapman, 1 Stark. 113, 
tate broker has no general lien 2 E. C. L. 51; Fordyce v. Peper, 16 
upon title papers in his hands, un- Fed. 516, 5 McCrary (U. S.) 221, 
less he is an attorney at law, and revd. 119 U. S. 469, 30 L. ed. 435, 7 
the relation of attorney and clignt Sup. Ct. 287; Fish v. Seeberger, 154 
subsists between him and his prin- 111. 30, 39 N. E. 982; Norman v. 
cipal. Carpenter v. Momsen, 92 Wis. Peper, 24 Fed. 403. 
449 65 N W 1027 66 N W. 692. ' Balderston v. National Rubber 
See also, Robinson ' v. Stewart, 97 Co., 18 R. I. 338, 27 Atl. 507, 49 Am. 
Mich. 454, 56 N. W. 853. But he ha^, St. 772. 

been held to have a lien on the "Stewart v. Lowe, 24 U. C. Q. B. 
specific deed delivered to him by his 434; Perin v. Parker, 126 111. 201, 
principal. Richards v. Gaskell, 39 18 N. E. 747, 2 L. R. A. 336, 9 Am. 
Kans. 428, 18 Pac. 494. See as to St. 571 ; Balderston v. National Rub- 
right to recover and when writing is ber Co., 18 R. I. 338, 27 Atl. 507, 49 
necessary and what is sufficient under Am. St. 772. 

Indiana statute, Miller V. Farr (Ind,'), " Kuf eke v. Kehlor, 19 Fed. 198; 

98 N. E. 805; Olcutt v. McClure (Ind. Reinhard Agency, § 452. 
App.), 98 N. E. 82; also under some- 



2908 



AGENCY. 



102 



the American cases that a factor may sell even in violation of in- 
structions to reimburse himself for advances, where he has made 
reasonable demand therefor and not been paid." But the Eng- 
lish courts deny the agent's right to make such a sale." So, 
where a factor, after having accounted to his principal, was com- 
pelled to refund to a purchaser the price of goods, on account of 
negligent packing, it was held that he could recover the amount 
thus paid by him from his principal.^- But he is not entitled to 
indemnity if the transaction from which the loss arose was 
unauthorized by the principal in the absence of any ratification 
by the principal.^^ A factor has a lien for his compensation, 
advances and expenditures legitimately made upon the goods 
consigned to him and in his possession," and if the goods have 
been sold the lien is upon the proceeds or securities for the price 
of the goods sold.^^ A factor has a general lien for any balance 
due him on the accounts between him and his principal f^ but such 
a lien does not accrue to the factor unless the goods were deliv- 
ered to him, or in his possession, as factor;" delivery to him 



"Parker v. Brancker, 22 Pick. 
(Mass.) 40; Dalby v. Stearns, 132 
Mass. 230; Davis v. Kobe, 36 Minn. 
214, 30 X. W. 662, 1 Am. St. 663; 
George Campbell Co. v. Angus, 91 
Va. 438, 22 S. E. 167. See also, Phil- 
lips V. Scott, 43 Mo. 86, 97 Am. Dec. 
369; Fordyce v. Peper, 16 Fed. 516, S 
McCrary (U. S.) 221, revd. 119 U. S. 
469, 30 L. ed. 435, 7 Sup. Ct. 287; 
Field V. Farrington, 10 Wall. (U. S.) 
141, 19 L. ed. 923. 

"Raleigh v. Atkinson, 6 M. & W. 
670; De Comas v. Prost, 3 Moo. P. C. 
(N. S.) 158. See also. Smart v. 
Sandars, 5 C. B. 895, 57 E. C. L. 
895. 

"' Beach v. Branch, 57 Ga. 362. See 
also, Randall v. Kehlor, 60 Maine 37, 
11 Am. Rep. 169. 

" Rogers v. Kneeland, 10 Wend. 
(N, Y.) 218, affd. 13 Wend. 114. 

"Fourth Xat. Bank v. American 
Mills Co., 29 Fed. 611, rehearing 
denied, 30 Fed. 420, judgment affd. 137 
U. S. 234, 34 L. ed. 655. 11 Sup. Ct. 
52; Shaw v. Ferguson, 78 Ind. 547; 
Johnson v. Campbell, 120 Mass. 449; 
Harrison v. Mora, 150 Pa. St. 481, 24 
Atl. 705 ; note to Bigelow v. Walker, 
58 Am. Dec. 156, 167. 



""Vail V. Durant, 7 Allen (Mass.) 
408, 83 Am. Dec. 695, and note; Com- 
mercial Nat. Bank v. Heilbronner, 
108 N. Y. 439, IS N. E. 701. See 
also, Drinkwater v. Goodwin, 1 
Cowp. 251; Brown v. Clayton, 12 Ga. 
564; Brander v. Phillips, 16 Pet. (U. 
S.) 121, 10 L. ed. 909. And it has 
been held that it may extend to pro- 
ceeds of an insurance policy taken 
out by him on goods afterward de- 
stroyed. Johnson v. Campbell, 120 
;\Iass. 449. Factor's lien, at least 
where the contract is one of pure 
agency, is a personal one, and not 
transferable. Barnes Safe &c. Co. 
V. Bloch Bros. Tobacco Co., 38 W. 
Va. 158, 18 S. E. 482, 22 L. R. A. 
850, 45 Am. St. 846, and note. Also 
note in 58 Am. Dec. 167. 

" Drinkwater v. Goodwin, 1 Cowp. 
251; Kruger v. Wilcox, Ambl. 252; 
Martin v. Pope, 6 Ala. 532, 41 Am. 
Dec. 66 ; Comer v. Way, 107 Ala. 300. 
19 So. 966, 54 Am. St. 93 ; Baker v. 
Fuller, 21 Pick. (Mass.) 318; Mc- 
Graft V. Rugee, 60 Wis. 406, 19 N. 
W. 530, 50 Am. Rep. 378. 

"Dixon V. Stansfield, 10 C. B. 398 
70 E. C. L. 398. 



I03 



FACTORS AND BROKERS. 



§ 2909 



of goods as agent for his principal by a third person does not give 
him a hen, as such possession is the possession of the principal," 
and the lien does not cover debts of the principal to the factor not 
connected in any way with their relation as principal and factor." 
The factor, as already intimated, must have possession of the 
goods in order to successfully assert a lien thereon.^" 

§ 2909. Liability of principal to third parties. — The princi- 
pal is liable, in general, on all contracts entered into in his behalf, 
by a broker or factor, which were actually or apparently author- 
ized, but not on contracts that were either unauthorized or in 
excess of the actual authority, unless they were within its ap- 
parent scope, or afterward ratified by the principal.^^ But the 
third party may usually act upon appearances, if the vendor has 
created these.^^ It has also been held that when a sale has once 
been completed between a broker and purchaser, and the goods 



" Gurney v. Sharp, 4 Taunt. 242. 

'°Ex parte Deeze, 1 Atk. 228; 
Thacher v. Hannahs, 4 Robt. (N. 
Y.) 407. See also, Barry v. Bon- 
inger, 46 Md. 59; Jarvis v. Rogers, 
15 Mass. 389. 

'"Warren v. First Nat. Bank, 149 
111. 9, 38 N. E. 122, 25 L. R. A. 746 ; 
Baker v. Fuller, 21 Pick. (Mass.) 
318. See also, Sweet v. Pym, 1 East 
4; Desha v. Pope, 6 Ala. 691, 41 Am. 
Dec. 76; Ruhl v. Corner, 63 Md. 
179; Valle v. Carre's Admr., 36 Mo. 
575, 88 Am. Dec. 161 ; Rosenbaum 
V. Hayes, 5 N. Dak. 476, 67 N. W. 
951. 

^ Smith V. Allen, 101 Iowa 608, 70 
N. W. 694; Wanless v. McCandless, 
38 Iowa 20; Lawrence v. Gallagher, 
42 N. Y. Super. Ct. 309, affd. 73 N. 
Y. 613; Higgins.v. McCrea, 116 U. 
S. 671, 29 L. ed. 764, 6 Sup. Ct. 
557. Thus, where a broker who was 
authorized to sell stock, but without 
special authority to sell it on credit, 
nevertheless did sell it on credit, it 
was held that the owner of the stock 
was not bound by the contract. Wilt- 
shire V. Sims, 1 Campb. 258. So, 
where a broker took notes and pay- 
ments for a sale different from those 
mentioned in his instructions, of 
which the purchaser had knowledge, 
the principal was held not bound by 



the sale. Siebold v. Davis, 67 Iowa 
560, 25 N. W. 778. And where a 
broker was directed to sell cotton 
and deliver a bill of lading for it 
only upon payment of a draft drawn 
on the purchaser for the goods, but 
delivered up the bill of lading upon the 
acceptance by the purchaser of such 
draft for such amount, and without 
receiving any money for the same, 
it was held that the purchaser took no 
title to the property, and that an 
action would lie by the owner against 
the third party for the conversion of 
the goods. The facts in the case show 
that the agency was but a special 
one, and the purchaser was bound to 
know the broker's authority. Stollen- 
werck v. Thacher, 115 Mass. 224. In- 
deed, the agency of a broker is usu- 
ally a limited one; and in the absence 
of circumstances showing that he has 
a general authority, parties who deal 
with a broker are bound to ascertain 
what the real extent of his authority 
is ; and if there are letters such par- 
ties should ascertain their contents. 
Merritt v. Wassenich, 49 Fed. 785. 
And if personal credit is given to a 
factor knowingly and exclusively, the 
principal is not liable. McCullough 
v. Thompson, 45 N. Y. Super. Ct. 449. 
"' See Association v. Miller, 1 Wkly. 
Notes Cas. (Pa.) 120. 



8 2909 AGENCY. 104 

shipped and bill of lading forwarded directly to the latter, it is 
not within the general authority of the broker to rescind the con- 
tract ; and if the broker receives from the purchaser the bill of 
lading indorsed by the latter, and thus obtains possession of the 
goods from the carrier or causes them to be delivered to another, 
the purchaser is not relieved from liability to the seller for the 
price at which the goods were sold on the original contract even 
though there is a custom by which such dealings between the 
broker and purchaser are recognized and upheld, unless the cus- 
tom was known to the seller, so that his assent thereto could rea- 
sonably be inferred.^^ Notwithstanding, a principal may be lia- 
ble for the acts of a broker even though the latter had no express 
authority from the former, but only did some act or acts from 
which a holding out could be properly inferred. The mere fact 
that a broker erects a sign upon property advertising it for sale by 
him, as agent, but without stating who is the principal or owner, 
does not constitute such a holding out by the principal of the 
broker to the public as will justify a third party in purchasing the 
property of the broker.-* It has also been held that if authority 
has been properly granted the broker, and in pursuance thereof 
he sells property and receives the required deposit, the purchaser 
can sue the seller and recover from him the deposit, if the condi- 
tions are broken ; and he need not, in such case, sue the broker.^' 
A vendor may also be liable to a purchaser who has incurred loss 
thereby for fraud or misrepresentation in a sale by the broker 
who made it ; but the purchaser must have relied upon the fraud- 
ulent or false representations, and not upon some other fact as an 
inducement.^" Where goods have been sold by sample, by the 
broker, there is, as already shown, an implied warranty that the 

"^ Kelly V. Kauffman Milling Co., ==Melone v. Ruffino, 129 Cal. 514, 

92 Ga. 105, 18 S. E. 363. In Clark 62 Pac. 93, 79 Am. St. 127. 

V. Cumming, 11 Ga.. 64, 4 Am. St. " Pineville Land &c. Co. v. Hol- 

72, it is held that where a broker is lingsworth, 21 Ky. L. 899, S3 S. W. 

authorized to sell only at a fixed 279. Also holding, however, if the 

price for a definite time his power is sale was to a firm of which the bro- 

limited by his instructions even ker was a member, the firm cannot 

though it had been usual in the recover damages from the principal 

course of dealing between the parties for the agent's wrong; for the other 

to continue to sell at such price. members of such firm were parties 

"Davis v. Gordon, 87 Va. 559, to the broker's violation of his trust. 
13 S. E. 35. 



I05 FACTORS AND BROKERS. § 2909 

bulk of the goods will correspond with the sample ; and, in such 
case, if they do not correspond, the seller is liable to the pur- 
chaser for the damage.^^ Ordinarily, however, a broker has no 
implied power, by the usages of trade, to warrant the goods to be 
of a merchantable quality, and his principal will therefore incur 
no liability on account of such warranty.^* 

"The principal may, of course, render himself liable for the 
unauthorized acts of the broker by a subsequent ratification; 
and such ratification will, as in other cases, relate back to 
the time the act was performed;^® and this is true whether 
the broker acted altogether without authority or simply ex- 
ceeded his powers. The ratification need not be made by the 
principal in person, but may be effected by another agent."^" 
Thus, where a real-estate broker undertook to sell the own- 
er's land without sufficient authority, and the owner sent an- 
other agent to make investigation, instructing him that if he 
found the contract-price was sufficient, and it was to the principal's 
interest to carry it into effect, to do so in his name, and such agent, 
upon satisfying himself that the sale would be beneficial to the 
principal, agreed in writing to carry out the broker's contract, — 
it was held that this was such a ratification as would bind the 
principal, and that the latter might, in a proper case, be decreed 
to make specific performance.^^ So, where a vendee of a mine 
accepted title and made part payment according to the terms 
agreed upon between the vendor of the mine and the broker 
through whom the sale was made, it was held that the vendor 
could not successfully deny the broker's authority to make the 
agreement and that the vendee had rendered himself liable on 
such agreement.^^ And a principal may even estop himself from 
pleading usury by permitting his broker to represent that a note 

"Boorman v. Jenkins, 12 Wend. Mines, 42 Fed. 633, afifd. 153 US. 

(N. Y.) 566, 27 Am. Dec. 158; Beebe 509, 38 L. ed. 802, 14 Sup. Ct. 842. 

V. Robert, 12 Wend. (N. Y.) 413, And where apples were bought 

27 Am. Dec. 158n. through a broker, who exammed and 

='Dodd V. Farlow, 11 Allen accepted them, it was held that the 

(Mass.) 426, 87 Am. Dec. 726. purchaser was estopped, m an action 

"°Roby V. Cossitt, 78 111. 638; for the purchase price, to claim that 

Rowan v. Hyatt, 45 N. Y. 138. the quality of such apples was not 

"Reinhard Agency, § 446. what had been bargained for. Kil- 

""Hoyt V. Tuxbury, 70 111. 331. lough v. Cleveland (Tex. Civ. App.), 

=' Seymour v. Slide & Spur Gold 33 S. W. 1040. "Whatever may 



§ 2910 AGENCY. 106 

offered for sale by such broker for the principal is "business pa- 
per." Thus, where one was indebted to a note broker, and, 
for the purpose of reducing such indebtedness, placed in the bro- 
ker's hands his own promissory note to be sold by the broker at a; 
certain discount, the proceeds to be applied on such indebtedness,' 
and the broker sold the note at such discount, representing that it 
was first-class business paper, and the maker of the note subse- 
quently brought suit against the holder to cancel the note, as usu- 
rious, it was decided that, the broker being the agent of the maker 
of the note in the sale thereof, the maker was estopped to set up 
the usury.^^ So, in a recent case, where the owner of a certificate 
of indebtedness of a corporation, issued by its receiver and trans- 
ferable only on the books of the company, indorsed in blank 
an assignment on its back and delivered it to his brokers for 
sale, he was held bound by the act of the brokers in transferring 
it to a bona fide purchaser for value.^* But in another recent 
case it was held that where a pledgee or purchaser takes stock 
with notice that he is dealing with an agent only, he cannot deny 
the rights of the principal, and that laches cannot be imputed to 
the owner of such stock in leaving it with his agent, with a power 
of attorney to sell or pledge, under instructions as to the figure 
at which he is to part with it.^^ 

§ 2910. Rights and remedies of factor against third parties. 

— In a proper case a factor can maintain an action in his own 

have been the kind or quality of the of a prior negotiation, at a discount of 

apples received by appellee," said the twelve per centum per annum. He 

court, "they were the ones purchased knew that the note was not business 

by him through his agent, with full paper. He had been a large purchaser 

knowledge of their quality and con- of paper of Bound & Co., and hence 

dition, under an agreement to pay knew their mode of effecting sales of 

for them the price sued for. There- paper. It is to be inferred that he 

fore, if the apples were not such as knew that in the purchase of paper, 

appellee ordered, and he has been in- at a greater rate of discount than 

jured by having put off on him apples seven per centum per annum, the 

of less value, he must look to his buyer usually exacted a representa- 

agent, and not to appellants, for the tion that the paper sold was business 

damages." paper, so that he might rely upon thel 

"^Ahern v. Goodspeed, 72 N. Y. fact, if indeed the paper was such, or, 

108. "It already appears," said the upon the estoppel if it was not." 

court, "that Ahern knew that the ^* McCarthy v. Crawford, 238 111. 

first note made by him was to be sold 38, 86 N. E. 750, 29 L. R. A (N S ) 

bv Bound & Co. [the brokers]. He 2S2, and note, 128 Am. St. 9Sn. 

also knew, as his testimony shows, ^ Sloan v. Brown, 228 Pa. St 495 

that it was to be sold in pursuance 11 Atl. 821, 139 Am. St. 1019. 



I07 FACTORS AND BROKERS. § 29 10 

name against a third party to whom he has sold and delivered 
goods for his principal, for their price."" "The provision, found 
in the varying codes, by which the real party in interest is re- 
quired to prosecute every civil action in his own name, does not 
stand in the way of a factor's right to maintain the action ; for 
there is generally contained in the codes the further provision, 
which forms an exception to that already mentioned, requiring 
any 'trustee of an express trust' to bring such action in his own 
name without joining the person for whose benefit the action is 
prosecuted."" But it is held that the principal has the right to 
intervene and control the suit, his claim being superior to that of 
the factor.^^ The principal cannot, however, by such intervention, 
defeat the factor's right to recover to the extent of his lien."° In 
such actions by the factor, the defendant can usually interpose any 
defense that would have been proper had the action been brought 
by the principal.*" A factor may also maintain an action in his 
own name against a wrongdoer for any injury to the goods, or 
for a breach of the contract of sale ;*^ and he may bring suit in his 
own name against the carrier of the goods consigned to him for 
conversion or for loss or injury caused by its negligence.*^ But it 
has been held that he cannot maintain such suit in his own name if 
he has no-lien.*^ It is certainly true that the factor may maintain 
such an action where he has such a lien, or has made advances 
giving him a special property,** and it has been held that to 

^ Drinkwater v. Goodwin, 1 Cowp. " Missouri Pac. R. Co. v. Peru- Van 

251; Graham v. Duckwall, 8 Bush Zandt Implement Co., 73 Kans. 295, 

(Ky.) 12; Toland v. Murray, 18 85 Pac. 408, 87 Pac. 80, 6 L. R. A. 

Johns. (N. Y.) 24. (N. S.) 1058, 117 Am. St. 468, 9 

"Reinhard Agency, § 453, citing Am. & Eng. Ann. Cas. 790; Boston 

Wolfe V. Missouri Pac. R. Co., 97 & M. R. Co. v. Warrior Mower Co., 

Mo. 473, 11 S. W. 49, 3 L. R. A. 76 Maine 251; Vose v. Allen, 3 

539, 10 Am. St. 331. The factor, by Blatchf. (U. S.) 289, Fed. Cas. No. 

reason of his lien, has such interest 17006. See also, Southern Exp. Co. 

as will entitle him to sue in his own v. Armstead, SO Ala. 350; note to 

name. Dows v. Greene, 32 Barb. Ramsey & Co. v. Kilsea, 22 L. R. A. 

(N. Y.) 490, affd. 24 N. Y. 638. 415. 

^Jackson Ins. Co. v. Partee, 9 '^Cobb v. Illinois Cent. R. Co., 88 

Heisk. (Tenn.) 296. 111. 394. See also, Grinnell-Collins 

== Drinkwater v. Goodwin, 1 Cowp. Co. v. Chicago &c. R. Co., 109 Minn. 

251. 513, 124 N. W. 377, 26 L. R. A. (N. 

"Gibson V. Winter, S B. & Ad. 96, S.) 437; Whaley v. Atlantic Coast 

27 E. C. L. 50. Line R. Co., 84 S. Car. 189, 65 S. E. 

"Groover v. Warfield, SO Ga. 644; 1022. 

Allen V. Steers, 39 La. Ann. 586, 2 "Vale v. Cerre's Admr., 36 Mo. 

So. 199. 75, 88 Am. Dec. 161; Adams v. Bis- 



§ 291 1 AGENCY. 108 

the extent of his lien on such goods for advances and the Hl-ce, he 
may even maintain an action against an attachment creditor of 
his principal who has taken the goods under a writ of attachment, 
and recover from him the value of the special property.*^ 

§ 2911. Rights and remedies of principal as to third parties, 

— The principal also has the right to sue on contracts made for 
him by the factor, the same as if made by himself;*" and this is 
true although the factor be a del credere agent.*' The principal 
cannot defeat the just claim of the factor, but he has the right 
to make collections of the remaining .portion of such claim.** If 
the factor improperly disposes of the goods, — as by pawning or 
selling them on his own credit, — the principal may forbid the pay- 
ment to be made to the factor ; and a subsequent payment to the 
latter would be no protection to the purchaser, unless he had given 
the factor some negotiable security which had actually been nego- 
tiated before notice.*' Where the factor disposed of the goods 
consigned, taking in exchange for them shares of stock in a com- 
pany in which he was a stockholder, it was held that the pur- 
chaser obtained no title, and that the consignor might recover the 
goods from such third party."" Even where the principal was 
not disclosed when the sale was made, and the transaction was in 
the factor's own name, the principal may nevertheless assert his 

sell, 28 Barb. (N. Y.) 382; Burrett 576. See also, as to protecting 

V. Rench, 4 McLean (U. S.) 325, factor's lien, Barry v. Page, 10 Gray 

Fed. Cas. No. 2201. See also, Thomas (:Mass.) 398; Girard v. Taggart, 5 

V. Atlantic Coast Line R. Co., 85 S. Serg. & R. (Pa.) 27, 9 Am. Dec. 

Car. 537, 64 S. E. 220, 67 S. E, 908. 327. 

And compare Walter v. Alabama " Kinder v. Shaw, 2 Mass. 398. 

Great Southern R. Co., 142 Ala. 474, The rule just stated does not apply, 

39 So. 87, So, a factor may exercise however, where the factor sells in his 

the right of stoppage in transitu in own name, being himself responsible 

a proper case. 4 Elliott R. R. (2d to the principal for the price of the 

ed.)> § 1540. goods sold, whether collected or not; 

■^ Heard v. Brewer, 4 Daly (N. Y.) nor where he sells them to his own 

136. creditor, where there are mutual 

"Burton v. Goodspeed, 69 111. 237. dealings; for in such instances the 

See also, Edmond v. Caldwell, IS principal can look to the factor alone 

Maine 340; Wadsworth v. Gay, 118 for payment. Kelley v. Munson, 7 

Mass. 44; Corlies v. Gumming, 6 Cow. Mass. 319, 5 Am. Dec. 47. See also, 

(N. Y.) 181. note in 28 L. R. A. (N. S.) 230, as 

"Moore v. Hillabrand, 37 Hun (N. to when principal can recover amount 

Y.) 491, 16 Abb. N. Cas. (N. Y.) unpaid. 

477. ""Wyeth v. Renz-Bowles Co., 23 

" Morris v. Cleasby, 1 AL & S. Ky. L. 2337, 66 S. W. 825. 



109 FACTORS AND BROKERS. § 29 1 1 

rights against the third party if the factor did not by his agree- 
ment with the principal assume the responsibihty for the price 
of the goods sold; and it is not necessary, it seems, in order to 
recover, that the principal should first make a demand of the third 
party.°^ 

The principal's claim in such cases is subject to any de- 
fenses, however, which the third party would have had against 
the factor/^ And it is generally held that, where the princi- 
pal was tmknown at the time of the sale, the third party can set 
off an antecedent debt which he held against the factor prior to the 
time of the transaction by which such third party himself became 
indebted." "Where a factor," said Lord Mansfield, "dealing 
for a principal but concealing that principal, delivers goods in his 
own name, the person contracting with him has a right to con- 
sider him to all intents and purposes as the principal ; and though 
the real principal may appear and bring an action upon that con- 
tract against the purchaser of the goods, yet that purchaser may 
set off any claim he may have against the factor in answer to the ' 
demand of the principal."^* But if the principal be known, or 
if the third party have good reason to suspect that the vendor of 
the goods is but an agent for some other person, he must make 
inquiry and ascertain, if he can, in what capacity or character the 
seller acts ; otherwise he will not be entitled to plead payment to 
the agent or a set-off.^' It is not sufficient in such case, to entitle 
the debtor to a set-off, that he was ignorant of the identity of the 

■^Foster v. Smith, 2 Coldw. Bros. v. Staton, 150 N. Car. 264, 63 

(Tenn.) 474, 88 Am. Dec. 604. See S. E. 950. But see Rodick v. Coburn, 

also, Miller v. Lea, 35 Md. 396, 6 68 Maine 170; Low v. Moore, 31 Tex. 

Am, Dec. 417 ; Ilslev v. Merrian, 7 Civ. App. 460, 72 S. W. 421 ; Warner 

Cush. (Mass.) 242, 54 Am. Dec. 721. v. Martin, 11 How. (U. S.) 209, 13 

'= George v. Claggett, 7 T. R. 359, L. ed. 667. 

2 Smith's Lead. Cas. (11th ed.) 139; "Rabone v. Williams, 7 T. R. 60n. 

Gardner v. Allen's Exr., 6 Ala. 187, "= Baring v. Corne, 2 B. & Aid. 137; 

41 Am. Dec. 45 ; Ruan v. Gunn, 11 Cooke v. Eshelby, L R. 12 App. Cas. 

Ga. S3 ; Roosevelt v. Doherty, 129 271 ; Miller v. Lea, 35 Md. 396, 6 Am. 

Mass. 301, 37 Am. Rep. 356. See also, Rep. 417. See also, Quinn v. Sewell, 

Eldridge v. Finningar, 25 Okla. 28, 50 Ark. 380, 8 S. W. 132; Moline 

105 Pac 334, 28 L. R. A. (N. S.) Malleable Iron Co. v. York Iron Co., 

227, and note. 83 Fed. 66, 27 C. C. A. 442 ; Rice &c. 

■"Hogan V. Shorb, 24 Wend. (N. Malting Co. v. International Bank, 

Y.) 458. See also, Ruan v. Gunn, 185 111. 442, 56 N. E. 1062; note in 

11 Ga. 53; Wiser v. Springside Coal 28 L. R. A. (N. S.) 231. 
Min. Co., 94 111. App. 471 ; Winslow 



§ 291 1 AGENCY. no 

real principal ; he must have been unaware also that the seller was 
acting as agent." It has been held, however, that the mere fact 
that the seller was in the commission business would not of itself 
be notice to the purchaser that he was a factor in that particular 
transaction, if he also carried on business on his own account." 
"Even where the factor takes a note for the purchase-money 
payable to himself individually, the principal may sue for the 
price unless the same was taken as a payment or amounted to such 
in law.^^ * * * Ti^g factor holds the goods as trustee of the 
principal, and the principal may follow them into the hands of 
any person except a bona fide purchaser, where they can be iden- 
tified.^" Under the common law, one who acquires the princi- 
pal's goods from a factor by barter gets no title to them, and the 
principal may recover them in specie.*"* In such case the want of 
knowledge of the third party affords no protection; for the factor 
can give no title to the property, to which he has none himself, 
except in the usual course of business." If the factor thus dis- 
pose of the goods of his principal, even to an innocent purchaser, 
the principal may maintain against the latter an action of trover."" 
The principal may, however, estop himself from denying the fac- 
tor's authority by clothing him with the apparent muniments 
of absolute title.""^ "Factors' acts" or other statutes, in many 
states, have changed or modified some of the common-law rules 
above stated, affording protection in many instances to those who 
deal in good faith with the factor.*'* 

"" Semenza v. Brinsley, 18 C. B. Yards Nat. Bank v. Gillespie, 137 U. 

(N. S.) 467; New Zealand &c. Land S. 411, 34 L. ed. 724. 

Co. V. Ruston, L. R. 5 Q. B. Div. ™ Guerreiro v. Peile, 3 B. & Aid. 

474; Miller v. Lea, 35 Md. 396, 6 Am. 616, S E. C. L. 354. 

Rep. 417. " Romeo v. Martucci, 11 Conn, 

"'Hogan V. Shorb, 24 Wend. (N. 504, 45 Atl. 1, 99, 47 L. R. A. 601, 11 

Y.) 458. But see Baxter v. Sher- Am. St. 327; Potter v. Dennison, S 

man, IZ Minn. 434, 76 N. W. 211, Gill. (111.) 590. 

72 Am. St. 631. "' Romeo v. Martucci, 72 Conn. 

"'Corlies V. Gumming, 6 Cow. (N. 504, 45 Atl. 1, 99, 47 L. R. A. 601 11 

Y.) 181. Am. St. 327; Potter v. Dennison, 5 

°»Clemmer v. Drovers' Nat. Bank, Gill. (111.) 590; 2 Kent Com (14th 
157 111. 206, 41 N. E. 728; National ed.) 625. See also, Neill v Billings- 
Cordage Co. v.. Sims, 44 Nebr. 148, lev, 49 Tex. 161. 

62 N. W. 514; Cady v. Nat. Bank, ''Dunlap's Paley Ag 212- Rein- 

46 Nebr. 756, 65 N. W. 906; Baker hard Agency § 454 

V. Nat. Exch. Bank, 100 N. Y. 31, 16 " See 12 Am. & Eng Encv L (2d 

Abb. N, Gas. (N. Y.) 458, 2 N. E. ed.). Tit. "Factors' Acts ; Willston 

452, S3 Am. Rep. ISO; Union Stock on Sales, § 318, et seq 



Ill FACTORS AND BROKERS. § 29 1 2 

§ 2912. Del credere factors. — A del credere factor practi- 
cally insures the collection of the debts arising from sales of his 
principal's goods, for which he receives an extra consideration 
called a "del credere commission.'"'^ Whether the relation of 
a del credere factor to the principal exists may be implied by 
the course of dealing between the parties."" The English cases 
now hold that the factor is only a guarantor, and can be rendered 
liable only after the debt has become due and there has been a de- 
fault by the debtor, and the remedy against him exhausted." 
The American decisions generally hold to the other view; they 
make the position of the factor one more in the nature of a sure- 
tyship, or as one who is absolutely liable, and render him liable, in 
the first instance, after the debt has become due."^ "Although the 
factor is absolutely liable, he is not bound to pay, until the money 
becomes due from the purchaser.""" There is, under either view, 
no liability until the debt has become due.'" If the agent has 
accepted depreciated currency or other articles of little or no 
value therefor, he must account for the entire sum.'^ And, al- 
though the factor becomes liable to the principal upon the expira- 
tion of the credit, the main debtor is still liable to the principal 
also, and may be sued by him when the right of action has ac- 
crued.'^ > 

The relation between a principal and a del credere factor is, 
in many respects, a peculiar one. If he becomes primarily in- 

^ Grove v. Duboid, 1 T. R. 112; Rubber Co., 18 R. I. 338, 27 Atl. 

Morris v. Cleasby, 4 M. & S. 566. 507, 49 Am. St. 772; note in 58 Am. 

See also, note in 58 Am. Dec. 171; Dec. 171. 

Balderston v. National Rubber Co., °° Woodworth, J., in Leverick v. 

18 R. I. 338, 27 Atl. 507, 49 Am. Meigs, 1 Cow. (N. Y.) 645. 

St. 772. "Lewis V. Brehme, 33 Md. 412, 3 

"^ Shaw V. Woodcock, 7 B. & C. 73 ; Am. Rep. 190 ; Wallace v. Castle, 14 

National Cordage Co. v. Sims, 44 Hun (N. Y.) 106; Leverick v. 

Nebr. 148, 62 N. W. 514; Balderston Meigs, 1 Cow. (N. Y.) 645; Bradley 

V. National Rubber Co., 18 R. I. 338, v. Richardson, 2 Blatchf. (U. S.) 343, 

27 Atl. 507, 49 Am. St. 772. Fed. Cas. No. 1786. 

"Morris v. Cleasby, 4 M. & S. "Dunnell v. Mason, 1 Story (U. S.) 

566; Hornby v. Lacy, 6 M. & S. 166; 543, Fed. Cas. No. 4179; Muller v. 

Peele v. Northcote, 7 Taunt. 478, 2 Bohlens, 2 Wash. (U. S.) 378, Fed. 

E. C. L. 456. Cas. No. 9914. 

™Mechem Agency, § 1014; Lewis ''Leverick v. Meigs, 1 Cow. (N. 

v. Brehme, 33 Md. 412, 3 Am. Rep. Y.) 645; Balderston v. National Rub- 

190; Leverick v. Meigs, 1 Cow. (N. ber Co., 18 R. L 338, 27 Atl. 507, 49 

Y.) 645; Greentree v. Rosenstock, Am. St. 772. 
61 N. Y. 583; Balderston v.. National 



§ 2912 AGENCY. 



112 



debted to the principal by virtue of the sale, is he also the owner 
of the goods, when the matter is considered in view of his rela- 
tion to the purchaser? If he is only a guarantor, or even a 
surety, is his undertaking not one by which he answers for the 
debt of another, and therefore within the purview of the statute 
of frauds? These are important questions, and the answers that 
have been given to them are not based upon the most satisfactory 
reasoning. True, it is held that the undertaking is not within the 
statute;'^ and the reason given for this conclusion is that it is in 
the nature of an original undertaking, though it has also some of 
the elements of a guaranty, but that guaranties do not always have 
to be in writing.''* The factor may collect from the purchaser in 
his own name, not because he was the owner of the goods sold, 
but by reason of his peculiar relation to the principal and of the 
special property he has in them. In this way only can the doc- 
trine be explained which permits the principal to intervene if he 
chooses to exercise that privilege.'^ The property never becomes 
that of the factor absolutely; and his right over it, except to the 
extent of his vested interests, continues until after sale, to be fol- 
lowed only by his right to collect the proceeds. The del credere 
factor has a lien upon the goods and proceeds for advances, com- 
missions, etc., the same as any other factor.'" While such factor 
guarantees the solvency of the purchaser to whom he sells, the 
debt is not extinguished as to such purchaser until actually paid 
in money to the factor or principal. He does not, on the other 
hand, warrant the payment of the remittance, if under the con- 
tract with his principal he undertakes to remit to him. As to 
collection and remittance, a del credere factor is under the same 
obligations as any other agent whose duty it is to collect and remit. 
In this regard he is only required to use proper care and diligence 
in purchasing the remittance; he does not insure its payment." 

"Wolff V. Koppel, S Hill (N. Y.) "See Miller v. Lea, 35 Md. 396, 6 

458, affd. 2 Den. (N. Y.) 368, 43 Am. Rep. 417. 

Am. Dec. 751; Sherwood v. Stone, "Miller v. Lea, 35 Md. 396, 6 Am. 

14 N. Y. 267; Swain v. Nesmith, 7 Rep. 417; Holbrook v. Wight, 24 

Pick. (Mass.) 220, 19 Am. Dec. 282. Wend. (N. Y.) 169, 35 Am. Dec. 

See also, ante, vol. 2, § 1244. 607; Merrill v. Thomas, 7 Daly (N. 

"Wolff V. Koppel, 5 Hill (N. Y.) Y.) 393. 

458, affd. 2 Den. (N. Y.) 368, 43 "Story Ag. (9th ed.), § 215. 
Am. Dec. 751, where the authorities 
are reviewed by Cowen. J. 



CHAPTER LXIV. 



TRAVELING SALESMEN. 



§ 2915. Generally — Distinguished from § 2918. Rejection or acceptance of 

pedlers and hawkers — Li- agent's act. 

censes. 2919. Necessary expenses — Sale of 

2916. Duties and powers of travel- samples. 

ing salesmen generally — No 2920. Drummer's samples not or- 

power to receive payment. dinary baggage — Contracts 

2917. No implied authority to take and custom as to carriage. 

back or exchange. 

§ 2915. Generally — Distinguished from pedlers and hawk- 
ers — Licenses. — An important class of agents in the conduct 
of commercial or mercantile business in these days consists of 
traveling salesmen, commercial travelers or drummers, as they 
are variously called. Such an agent has been defined as one "who 
travels for a wholesale merchant taking orders for goods to be 
shipped to retail dealers."^ Ordinarily, he exhibits samples of 
the goods and takes orders for them, to be delivered afterward 
by the principal, and the dealer thus sells by him as agent, and 
he is not strictly either a pedler or a merchant.^ The state has 
power to tax pedlers and hawkers, and, ordinarily, municipal cor- 
porations are given power to impose a license upon pedlers and 
hawkers and to make police regulations in regard to their busi- 
ness, because they carry their goods with them and the same con- 
stitute a portion of the bulk of the taxable property of the state, 
and because, if such an occupation is not restrained, it is liable to 
become a nuisance;^ while drummers, or commercial travelers, 
usually sell from samples and generally for firms or corporations in 

"• Anderson's Law Diet., Tit. lor, 58 Miss. 478, 38 Am. Rep. 336. 

"Drummer," citing Montana v. ^Kansas City v. Collins, 34 Kans. 

Farnsworth, 5 Mont. 303, 5 Pac. 869, 434, 8 Pac. 865, citing many cases, 

writ of error dismissed 129 U. S. 104, Compare State v. Ascher, 54 Conn. 

32 L. ed. 616, 9 Sup. Ct. 253; Single- 299, 7 Atl. 822. 

ton V. Fritsch, 4 Lea (Tenn.) 93. 'See generally as to the constitu- 

See also, State v. Miller, 93 N. Car. tionality and validity of such taxes, 

511, 53 Am. Rep. 469; Ex parte Tay- licenses and regulations: Duluth v. 

8 — Contracts, Vol. 4 



§ 2915 AGENCY. 114 

Other states, and a license fee or tax imposed upon such drummers 
and such goods as they sell, if from another state or states, would 
be taxing interstate commerce, which under the federal constitu- 
tion cannot be legally done/ It has been held that a person who 
solicits and takes orders for books published by his principal, who 
is a resident of another state, without delivering such books at the 
time the orders are taken, is not a hawker or pedler, but a drum- 
mer or canvasser, within the meaning of a statute giving munici- 
pal corporations the power "to license, tax, regulate, suppress and 
prohibit 'hawkers' and 'pedlers.' '"^ Pedlers and hawkers are those 
who travel from city to city or from house to house, and sell 
commodities which they ordinarily carry with them, and deliver 
at once upon sale, as distinguished from those who sell at an es- 
tablished shop," or by sample for future delivery. One who thus 
goes from house to house to sell goods, though it be on the instal- 
ment plan, delivering them as sold, is a pedler.'' But, under ex- 
ceptional circumstances, one may be a pedler, although he does 
not deliver at once when the order is taken. Thus, butchers 
who take orders for meat from house to house, and then deliver 
it to the consumers, have been held to be pedlers.^ And a person 

Krupp, 46 :\Iinn. 435, 49 N. W. 235; 629, 67 N. W. 824: Stoutenburgh v. 
Morrill V. State, 38 Wis. 428, 20 Am. Hennick, 129 U. S. 141, Z2 L. ed. 
Rep, 12, revd. 154 U. S. 626, 23 L. 637, 9 Sup. Ct. 256; Dozier v. State, 
ed. 1009, 14 Sup. Ct. 1206; Com- 218 U. S. 124, 54 L. ed. 965, 30 Sup. 
monwealth v. Gardner, 133 Pa. St. Ct. 649, 28 L. R. A. (N. S.) 264, and 
284, 19 Atl. 550, 7 L. R. A. 666, 19 note; note to State v. Bayer, 19 L. 
Am. St. 645, writ of error dismissed, R. A. (N. S.) 297. 
149 U. S. 774, 57 L. ed. 962, 13 Sup. " See Illinois cases above cited, and, 
Ct. 1047 ; In re Fisher, 3 Lane. Bar. to the same effect, Kansas City v. 
No, 38, p, 1 ;In re Morris's Petition, Collins, 34 Kans. 434, 8 Pac. 865. 
5 Pa. County Ct. 193 ; Commonwealth ° Emmons v. Lewistown, 132 111, 
V. Brinton, 132 Pa, St, 69, 18 Atl, 380, 24 N, E, 58, 8 L, R, A, 328, 22 
1092, But it is held that municipal Am, St, 540 ; Commonwealth v. Card- 
corporations have no inherent power ner, 133 Pa, St, 284, 19 Atl, 550, 7 L, 
to tax or license them. Smith R, A, 666, 19 Am, St, 645, writ of er- 
Munic, Corp,, § 1477; Shelton v. Mo- ror dismissed, 149 U, S, 774, 57 L, ed, 
bile, 30 Ala, 540, 68 Am, Dec, 143 ; 962, 13 Sup, Ct, 1047, See also, note 
Van Hook v, Selma, 70 Ala, 361, 45 in 3 L, R, A. 705, 
Am, Rep, 85, See generally, notes ' South Bend v, Martin, 142 Ind, 
in 19 L, R, A, (N, S,) 297; 21 L, R, 31, 41 N, E, 315, 29 L. R. A, 531; 
A, (N, S,) 279, 349; 28 L, R, A, (N, People v. Sawyer, 106 ^lich, 428, 64 
S,) 264, N, W, 333; St, Paul v. Briegs, 85 
'Emmons v, Lewistown, 132 111, l\Iinn, 290, 88 N, W, 984, 89 Am. 
380, 24 N. E, 58, 8 L, R, A. 328, 22 St. 554. 

Am St 540; Cerro Gordo v. Raw- 'Davis v, Macon, 64 Ga. 128, 37 

lings 135 111, 36, 25 N, E, 1006, See Am, Rep, 60; Duluth v, Krupp, 46 

also State v, O'Connor, 5 N, Dak. Minn. 435, 49 N, W, 235, 



115 TRAVELING SALESMEN. § 2916 

who carries jewelry from county to county to sell is a pedler." 
So, it has been said that the terms "hawkers," "pedlers," and 
"traveling merchants" are in some sense synonymous, meaning 
those who go about with goods making or attempting to make 
sales, and making delivery."" Selling goods by sample, however, 
is not, ordinarily, peddling." But "any method of selling goods, 
wares or merchandise by outcry on the streets, or public places in 
a city, or by attracting persons to purchase goods exposed for 
sale at such places, by placards or signals, or by going from house 
to house, selling or offering goods for sale at retail, to individuals 
not dealers in such commodities, whether the goods be carried 
along for delivery presently or whether the sales are made for 
future delivery" may constitute the person so selling a hawker 
or pedler within the meaning of a statute."^ On the other hand, 
soliciting orders for the making of shirts,"^ or clothing,"* or for 
sewing-machines," or beer in bottles,"" to be delivered in the fu- 
ture, is not peddling or hawking, although an article is occasion- 
ally delivered at the time of sale."' 

§ 2916. Duties and powers of traveling salesmen generally 
— No power to receive pajmient. — As a general rule, a drum- 
mer's duties are confined to the soliciting and taking of orders 
for goods. "^ He has no implied authority to collect money, not 
being in possession of the goods or having other indicia of author- 

" Wynne v. Wright, 18 N. Car. 19. 462; Stuart v. Cunningham, 88 Iowa 

"Commonwealth v. Edson, 2 Pa. 191, 55 N. W. 311, 29 L. R. A. 439; 

County Ct. ill. Hewson v. Englewood, 55 N. J. L. 

"Davenport v. Rice, 75 Iowa 74, 522, 27 Atl. 904, 21 L. R. A. 736; 

39 N. W. 191, 9 Am. St. 454; Com- Stamford v. Fisher, 140 N. Y. 187, 

monwealth v. Jones, 7 Bush (Ky.) 35 N. E. 500. 

502; State v. Hoffman, 50 Mo. App. "Ex parte Taylor, 58 Miss. 478, 38 

585 ; Commonwealth v. Eichenburg, Am. Rep. 336 ; Chambers v. Short, 79 

140 Pa. St. 158, 21 Atl. 258. Mo. 204. And unless expressly au- 

" Graffty v. Rushville, 107 Ind. 502, thorized or held out as having au- 

57 Am. Rep. 128. thority to make an absolute sale 

" Elgin V. Picard, 24 111. App. 340. without approval or acceptance of 

"Radebaugh v. Plain City, 11 Ohio his principal he has no such power. 

Dec. 612, 28 Wkly. Law Bui. 107. Gould v. Gates Chair Co., 147 Ala. 

"'Commonwealth v. Farnum, 114 629, 41 So. 675; L. A. Becker Co. v. 

Mass. 267; State v. Moorhead, 42 Clardy, 96 Miss. 301, 51 So. 211, 

S. Car. 211, 20 S. E. 544, 26 L. R. A. Ann. Gas. 1912 B. 355, and note. But 

585, 46 Am. St. 719. see where he is so held out, Banks 

" DuBoistown v. Rochester Brew. v. Everest, 35 Kans. 687, 12 Pac. 141 : 

Co., 9 Pa. County Ct. 422. Brennen v. Dansby, 43 Tex. Civ. 

" See also, Reinhard Agency, § App. 7, 95 S. W. 700. And see as to 



§ 2917 AGENCY. 116 

ity, and if the purchaser pays such an agent he does so at his peril, 
and the burden is upon him to prove that the agent possessed such 
authority." In the absence of actual authority to collect pay- 
ment, or ratification of the act, the principal can only be held lia- 
ble where he holds out the agent as possessing such power ; it is 
not implied in the authority to take orders for goods.^" The pur- 
chaser cannot with safety rely upon the statement of the agent 
that he possesses such authority, and a holding out by the princi- 
pal can generally be shown only by admissions or conduct on the 
part of such principal.^^ Even where a drummer has power to 
make collections, it is held that he has no implied authority to in- 
dorse checks in the name of his principal." But possession of 
the goods and a usage or holding the agent out as having authority 
to receive payment may give rise to the implication of authority 
to receive payment and bind the principal.^^ 

§ 2917. No implied authority to take back or exchange. — 

It is not, it seems, within the implied powers of such an agent to 
cancel his contracts for and take back goods previously sold to 
the customer which are not satisfactory to him.^^ Certainly such 

custom, Mabray v. Kelley &c. Shoe mere solicitor for orders. Law v. 

Co., 1i Mo. App. 1. But compare Stokes, 3 Vroom (N. J.) 249, 90 Am. 

Dean v. Everett, 90 Iowa 242, 57 N. Dec. 655. 

W. 874. ="" Jackson v. Nat. Bank, 92 Tenn. 

"Butler V. Dorman, 68 Mo. 298; 154, 20 S. W. 802, 18 L. R. A. 663, 

Chambers v. Short, 79 Mo. 204. See 36 Am. St. 81. 

also, Clark v. Smith, 88 111. 298; Kane "= Meyer v. Stone, 46 Ark. 210, 55 

V. Barstow, 42 Kans. 465, 22 Pac. Am. Rep. 577 ; Bailey v. Pardridge, 

588, 16 Am. St. 490; note in 18 L. 134 111. 188, 27 N. E. 89; Cross v. 

R. A. 663. But compare Trainer v. Haskins, 13 Vt. 536 ; Kasson v. Nolt- 

Morison, 78 Maine 160, 3 Atl. 185, ner, 43 Wis. 646. See also, Rice v. 

57 Am. Rep. 790; Hoskins v. John- Groffman, 56 Mo. 434; Jenney v. 

son, 5 Sneed (Tenn.) 469; Collins Boyd, 30 Minn. 319, 15 N. W. 308. 

V. Newton, 7 Baxt. (Tenn.) 269. °* Diversy v. Kellogg, 44 111. 114, 

^° Kornemann v. Monaghan, 24 92 Am. Dec. 154. Relying on this 

Mich. 36; Chambers v. Short, 79 case in Reinhard Agency, § 463, it 

Mo. 204. is said : "The sale between the cus- 

^ Holland v. Van Beil, 89 Ga. 223, tomer and the principal, when made 

IS S. E. 302 ; Kornemann v. Mon- by a traveling salesman, unless it be 
aghan, 24 Mich. 36; McKindly v. in writing, is complete only from the 
Dunham, 55 Wis. 515, 13 N. W. 485, time the goods are shipped, provided 
42 Am. Rep. 740. Where the agent is the principal ships within a reason- 
intrusted with the possession of able time the amount and quality of 
goods, or sells over the counter, au- the goods ordered, and in the manner 
thority to receive paj'ment will gen- directed. From that time on, if the 
erally be implied, unless forbidden by contract be valid and binding, and 
the seller, the rule in such cases being the delivery is to be 'f. o. b.,' the title 
different from what it is in case of a to the goods vests in the pur- 



117 TRAVELING SALESMEN. § 2918 

an agent has no implied power to barter, trade or exchange the 
goods for others of the buyer or other persons/' Indeed, the 
general rule is that an agent, even wrhere he is authorized to re- 
ceive payment, has not prima facie authority to receive anything 
but money.''* 

§ 2918. Rejection or acceptance of agent's act. — If the 
agent exceeds his authority, by agreeing to conditions not within 
the scope of his powers, the principal may reject them; but if he 
accepts the contract of the agent, he will be bound by it, and he 
cannot accept it in part and repudiate it in part.^^ So, where a 
drummer made an unauthorized arrangement with a customer to 
discount a bill ten per cent, off list price, the principal was held 
not bound by the arrangement ; and since the agreement was be- 
yond the apparent scope of the agent's authority, the purchaser 
was held liable for the list prices.^' In that case, however, the 
purchaser had notice that the agent had no such authority, from 
the fact that the latter agreed to make good the discount himself, 
if the principal did not do so ; otherwise it would seem that the 
purchaser had the right to dictate his own terms of the purchase, 
and if such terms were not agreeable to the seller, he could de- 
cline to forward the goods. 

§ 2919. Necessary expenses — Sale of samples. — It is with- 
in the implied powers of a commercial traveler who is paid a 
certain salary and traveling expenses for his compensation, to 
bind his principal for the use of a horse and carriage used by him 
in his principal's business.^' An agent's power to do a thing usu- 

chaser, subject only to stoppage in Atl. 251; Taylor &c. Organ Co. v. 

transitu. If a different kind or quan- Starkey, 59 N. H. 142. See also, 

tity be shipped from those ordered, Sioux City &c. Seed Co. v. Magnus, 

or if shipment be delayed an un- 1 Colo. App. 451, 27 Pac. 257; 

reasonable time, the purchaser is not Clough v. Whitcomb, 105 Mass. 482. 

bound to receive the shipment, and But compare Billings v. Mason, 80 

may avoid liability therefor by noti- Maine 496, 15 Atl. 59. 

fying the seller, within a reasonable "" Babcock v. Deford, 14 Kans. 408. 

time, thatjie declines to receive the "Benj. Sales (Bennet's 7th ed.), 

goods. But if he receive and ap- § 742. 

propriate the goods, he is liable for ^Taylor Mfg. Co. v. Brown, 4 

them the same as if he had ordered Wills. Civ. Cas. Ct. App., § 3 (Tex.), 

them, and he must pay what they 14 S. W. 1071. 

are reasonably worth." » Bentley v Doggett, 51 Wis 224, 

»= Hayes v. Colby, 65 N. H. 192, 18 8 N. W. 155, 2,1 Am. Rep. 827; Hunt- 



§ 2920 AGENCY. 118 

ally includes all the necessary means of doing it; and where an 
agent is sent by his principal with large trunks and sample cases, 
it is but natural that he should have the means of transporting 
these over the route of his travels. So, if the only way he can go 
from one town to another on the route laid out for him is by 
horse and carriage the power to hire the same would necessarily 
be implied. But, of course, he has no unlimited or unreasonable 
power in such cases ; and it has been held that as drummers, while 
actively engaged in business of their principal, usually pay their 
hotel bills in cash, hotel keepers cannot collect from the principal 
a bill for a drummer's board charged to the employer without 
notice.^" Nor has a drummer, in the absence of any usage or the 
like to that effect, an implied authority to sell his samples and 
take pay for them; and if he does, the owner may recover their 
value from the purchaser, in a proper action.'^ 

§ 2920. Drummer's samples not ordinary baggage — Con- 
tracts and custom as to carriage. — A drummer's samples not 
knowingly received by a carrier as baggage are not included in the 
ordinary baggage of a passenger for which a common carrier be- 
comes liable in case of loss or injury to the baggage, unless the 
baggage became injured or lost by the negligence of the car- 
rier, which it is sometimes said must be "gross ;"^- but the com- 
pany is liable, even for ordinary negligence, or as an insurer, 
where the railroad agent having control of the receipt of 
the baggage had knowledge of what was contained in such bag- 
gage, and no misrepresentation as to such contents was made 
to such railroad agent by the drummer having it in charge.^' 
In such case, it has been held that the contract is a personal 
one between the drummer and the carrier, and the principal, 

ley V. Mathias, 90 N. Car. 101, 47 948, But compare Bailey v. Pard- 

Am. Rep. 516. ridge, 134 111. 188, 27 N. E. 89. 

=° Covington v. Newberger, 99 N. ^ Collins v. Boston &c. R., 10 Cush. 

Car. 523, 6 S. E. 205. See also, Nich- (Mass.) 506; Humphreys v. Perry, 

olson V. Pearse, 61 Vt. 534, 17 Atl. 148 U. S. 127, 37 L. ed. 587, 13 Sup. 

720, holding that a drummer has no Ct. 711; 4 Elliott R. R. (2d ed.), § 

authority to give goods of the prin- 1649. 

cipal in exchange for board. "^ Dibble v. Brown, 12 Ga. 217, 56 

•"Kohn V. Washer, 64 Tex. 131, 53 Am. Dec. 460; Stimson v. Connecti- 

Am. Rep. 745. See also. Savage v. cut River R. Co., 98 Mass. 83, 93 Am. 

Pehon, 1 Colo. App. 148, 27 Pac. Dec. 140; Humphreys v. Perry, 148 



119 



TRAVELING SALESMEN. 



§ 2920 



though he owns the samples, has no right of action.''' A travel- 
ing salesman's catalogue or price list may properly be considered 
as part of his personal baggage,'° and it has been held that judicial 
notice may be taken of the custom of railroads to carry sample 
trunks of commercial travelers as baggage of their employers, 
although not of the exact conditions or limitations under which 
it is done.'* 



U. S. 627, 13 Sup. Ct. 711, Zl L. ed. 
587. See also, 4 Elliott R. R. (2d 
ed.), § 1649; Bergstrotn v. Chicago 
&c. R. Co., 134 Iowa 223, 111 N. W. 
818, 10 L. R. A. (N. S.) 1119, and 
note; New Orleans & Northeastern 
R. Co. V. Shackelford, 87 Miss. 610, 
40 So. 427, 4 L. R. A. (N. S.) 1035, 
and note, 112 Am. St. 461 ; Oakes v. 
Northern Pac. R. Co., 20 Ore. 392, 
26 Pac. 230, 12 L. R. A. 318, 23 Am. 
St. 126. 



=' Dibble V. Brown, 12 Ga. 217, 56 
Am. Dec. 460. 

"''Staub V. Kendrick, 121 Ind. 226, 
23 N. E. 779, 6 L. R. A. 619; Gleason 
V. Goodrich Transp. Co., 32 Wis. 85, 
14 Am. Rep. 716. 

=°McKibbin v. Great Northern R. 
Co., 78 Minn. 232, 80 N. W. 1052; 
Fleischman v. Southern R. Co., 76 S. 
Car. 237, 56 S. E. 974, 9 L. R. A. (N. 
S.) 519. 



CHAPTER LXV. 



EVIDENCE IN AGENCY CASES. 



§ 2925. Agency or authority — Ques- 
tion of law or fact — Burden 
of proof. 

2926. Authority of agent — How 

proved — Parol evidence — 
Seal. 

2927. Evidence of agency — Circum- 

stantial evidence. 

2928. Agency inferred from rela- 

tion of parties. 

2929. Habit and course of dealing. 



§ 2930. Course of dealing — Acts of 
agent in other transactions. 

2931. Declarations and admissions 

of agent. 

2932. Admissions of principal. 

2933. Notice to agent as notice to 

principal. 

2934. Ratification. 

2935. Revocation and termination 

of agency. 



§ 2925. Agency or authority — Question of law or fact — 
Burden of proof. — As a general rule questions as to whether 
there is an agency and as to the authority of the agent, when the 
facts are in dispute, are mixed questions of law and fact, or ques- 
tions of fact for the jury under proper instructions from the 
court. ^ But it is for the court to decide whether there is any 
legal evidence sufficient to establish agency,^ and where the facts 
are undisputed or the question depends entirely on the construc- 
tion of an unambiguous written contract, the question is usually 
one of law for the court.' The burden of proof is, ordinarily. 



■Durrell v. Evans, 1 H. & C. 174, 
31 L. J. Exch. 337; New England 
Mortg. Security Co. v. Gay, 33 Fed. 
636, writ of error dismissed, 145 U. 
S. 123, 36 L. ed. 646, 12 Sup. Ct. 815 
(holding that ratification is for the 
jury where there is evidence tending 
to prove it) ; Hankinson v. Lombard, 
25 111. 572, 79 Am. Dec. 348; Mor- 
rison v. Whiteside, 17 Md. 452, 79 
Am, Dec. 661 ; Lovell v. Williams, 
125 Mass. 439; Thomas v. Wells, 140 
Mass. 517; Roberts v. Pepple, 55 
Mich. 367, 21 N. W. 319; Grand 
Rapids Elec. Co. v. Walsh Mfg. Co., 
142 Mich. 4, 105 N. W. 1 ; Commer- 
cial Un. Assur. Co. v. Elliott, 10 



Sad. (Pa.) 331, 13 Atl. 970; Willcox 
V. Hines, 100 Tenn. 524, 45 S. W. 
781, 66 Am. St. 761; Drakeley v. 
Gregg, 8 Wall. (U. S.) 242, 19 L. ed. 
409. 

" McClung's Exrs. v. Spotswood, 
19 Ala. 165; Louisville & N. R. Co. 
V. Gilmer, 89 Ala. 534, 7 So. 654; 
Coe v. Johnson, 6 Houst. (Del.) 9; 
National Mechanics' Bank v. Na- 
tional Bank, 36 Md. 5; Lamb v. Ir- 
win, 69 Pa. St. 436. 

' Gulick v. Grover, 33 N. J. L. 463, 
97 Am. Dec. 728. See also, Supreme 
Tribe of Ben Hur v. Hall, 24 Ind. 
App. 316, 56 N. E. 780, 79 Am. St. 
262; Howe v. Provident Fund See, 



I20 



121 



EVIDENCE IN AGENCY CASES. 



2926 



upon the party who seeks to estabUsh the relation of agency;* 
but this may sometimes depend upon the pleadings and the man- 
ner in which the question arises,^ and presumptions of authority 
sometimes arise so as to change at least the burden of producing 
evidence.® 

§ 2926. Authority of agent — How proved — Parol evidence 
— Seal. — It may be stated as a general rule that the authority 
of an agent may usually be proved by writing not under seal, or 
by words spoken, when there is no writing, or by circumstan- 
tial evidence and implication.'' But at common law, and in a 
few jurisdictions in this country, a written authority under seal 
is sometimes required, as, for instance, where the act is required 
to be done under seal.* So, it was formerly held that the author- 
ity of the agent of a corporation aggregate could be proved only 



7 Ind. App. 586, 34 N. E. 830; See- 
horn V. Hall, 130 Mo. 257, 32 S. W. 
643, 51 Am. St. 562; Belcher v. Man- 
chester B. & L. Assn., 74 N. J. L. 
833, 67 Atl. 399'; Loudon Sav. Fund 
Soc. V. Hagerstown Sav. Bank, 36 
Pa. St. 498, 78 Am. Dec. 290; Brad- 
street Co. V. Gill, 72 Tex. 115, 2 
L. R. A. 405, 13 Am. St. 768, and 
note. See also. Baker v. Seaward 
(Ore.), 127 Pac. 961. 

*3 Elliott Ev., § 1625; Sellers v. 
Commercial Fire Ins. Co., 105 Ala. 
282, 16 So. 798; Whitaker v. Ballard, 
178 Mass. 584, 60 N. E. 379; Quin- 
lan V. Providence Washington Ins. 
Co., 133 N. Y. 356, 31 N. E. 31, 28 
Am. St. 645 ; Duncan v. Hartman, 143 
Pa. St. 595, 22 Atl. 1099, 24 Am. 
St. 570, affd. 149 Pa. St. 114, 
24 Atl. 190; Anderson v. Rassmus- 
sen, 5 Wyo. 44, 36 Pac. 820 ; Russ v. 
Telfener, 57 Fed. 973, affd. 60 Fed. 
228, 8 C. C. A. 585; Pole v. Leask, 
33 L. J. Ch. 155. See also. Shields 
V. Coyne, 148 Iowa 313, 127 N. W. 
63, Ann. Cas. 1912C, 90S. 

" See Montgomery v. Pacific Coast 
Land Bureau, 94 Cal. 284, 29 Pac. 
640, 28 Am. St. 122; Romans v. 
State, 51 Ohio St. 528, 37 N. E. 
1040. 

°Jarboe v. McAtee's Heirs, 7 B. 
Mon. (Ky.) 279; Finneran v. Leon- 
ard, 7 Allen (Mass.) 54, 83 Am. 
Dec. 665. See also, Montgomery v. 



Pac. Coast Land Bureau, 94 Cal. 284, 
29 Pac. 640, 28 Am. St. 122 ; Austrian 
V. Springer, 94 Mich. 343, 54 N. 
W. SO, 34 Am. St. 350; Campbell v. 
Manufacturers' Nat. Bank, 67 N. J. 
L. 301, 51 Atl. 497, 91 Am. St. 438. 
'3 Elliott Ev., § 1628; Story Ag. 
(9th ed.), § 47; Drumright v. Phil- 
pot, 16 Ga. 424, 60 Am. Dec. 738; 
Coles V. Trecothick, 9 Ves. 234. Agent 
may testify directly as to agency. 
LaWall V. Groman, 180 Pa. St. 532, 
2,1 Atl. 98, 57 Am. St. 662; Smith v. 
Kron, 96 N. Car. 392, 2 S. E. 533; 
Hatch V. Squires, 11 Mich. 185; 
Graves v. Horton, 38 Minn. 66, 35 
N. W. 568. See also, Uniontown 
Grocery Co. v. Dawson, 68 W. Va. 
332, 69 S. E. 845, Ann. Cas. 1912B, 
148. But agency cannot be shown 
by the alleged agent's declarations 
and statements out of court. Mul- 
lanphy Sav. Bank v. Schott, 135 111. 
655, 26 N. E. 640, 25 Am. St. 401, 
and note; Pepper v. Cairns, 133 Pa. 
St. 114, 19 Atl. 336, 7 L. R. A. 750, 19 
Am. St. 625, and note; 1* Elliott Ev., 
§ 252; 3 Elliott Ev., § 1636; elaborate 
note in 131 Am. St. 306. 

* See Elliott v. Stochs, 67 Ala. 336 ; 
Hayes v. Atlanta, 1 Ga. App. 25, 57 
S. E. 1087; Watson v. Sherman, 84 
111. 263; Berkeley v. Hardy, 5 B. & 
C. 355, 11 E. C. L. 495; 3 Elliott 
Ev., § 1628; Mechem Agency, § 93'; 
Reinhard Agency. § 57. 



8 2927 AGENCY. 122 

by a written instrument under seal. But this rule, as well as that 
requiring the use of a seal in other instances, has been greatly 
relaxed, and is abolished, at least in most instances, in nearly all 
the states." If, however, the express authority relied on is in 
writing, the writing must usually be produced; and if it appears 
from the nature of the case that the authority must have been in 
writing, parol testimony will not be admissible to prove it, unless 
a proper foundation is laid for its introduction as secondary 
evidence.^" 

§ 2927. Evidence of agency — Circumstantial evidence. — 

Agency may be proved by indirect or circumstantial evidence as 
well as by direct evidence. It may be indirectly established by, 
or implied from, evidence of the relative situation of the parties, 
or their habits and course of dealing, and the nature of the em- 
ployment, or by subsequent ratification.^^ Many illustrations of 
proof of agency by circumstantial evidence will be found in sub- 
sequent sections,^^ but among many others are those following: 
Proof that a person was openly acting as agent for another under 
circumstances implying knowledge on the part of the latter 
has often been held prima facie sufficient to charge the latter as 
principal.^* So, proof that the alleged principal permitted the 
supposed agent to perform similar acts and transactions with 
other persons has been held competent as tending to establish 

" See text writers referred to in Dec. 460 ; Hovey v. Deane, 13 Maine 

last preceding note. Also, Green 31 ; Johnson v. Mason, 1 Esp. 89. 

Co. V. Blodgett, 159 111. 169, 42 N. "3 Elliott Ev., § 1627; Story Ag. 

E. 176, SO Am. St. 146; Bank of (9tli ed. ) , § 45 ; 2 Kent Comm. (10th 

United States v. Dandridge , 12 ed.) 612, 613; Fouch v. Wilson, 59 

Wheat. (U. S.) 64, 6 L. ed. 552; Ind. 93; Kaufman v. Farley Mfg. Co., 

Logansport v. Dykeman, 116 Ind. 15, 78 Iowa 679, 43 N. W. 612, 16 Am. St. 

17 N. E. 587; Roehl v. Haumesser, 462; Duncan v. Hartman, 143 Pa. St. 

114 Ind. 311, 15 N. E. 345. Authority 595, 22 Atl. 1099, 24 Am. St. 570, 

may be presumed, however, where a affd. 149 Pa. St. 114, 24 Atl. 190; 

deed is sign.ed by one as agent of a Hansen v. Flint &c. R. Co., IZ Wis. 

corporation, and the corporate seal 346, 41 N. W. 529, 9 Am. St. 791. 

is aiBxed. Jinwright v. Nelson, 105 ^ See also, Isbell v. Brinkman, 70 

Ala. 399, 17 So. 91; Gutzeil v. Pen- Ind. 118; Indiana, B. & W. R. Co. v. 

nie, 95 Cal. 598, 30 Pac. 836; Gorder Adamson, 114 Ind. 282, 15 N. E. 5 ; 

V. Plattsmouth Canning Co., 36 Nebr. Strimpfler v. Roberts, 18 Pa. St. 283, 

548, 54 N. W. 830'; Fhnt v. Clinton 57 Am. Dec. 606. 

Co., 12 N. H. 430. "Indiana, B. & W. R. Co. v. 

"Richardson v. St. Joseph Iron Adamson, 114 Ind 282, 15 N. E. 5; 

Co., 5 Blackf. (Ind.) 146, Zi Am. Barnett v. Glutting, 3 Ind. App. 415, 

29 N. E. 154. 



123 EVIDENCE IN AGENCY CASES. § 2928 

the existence of an agency." So, too, a commercial correspond- 
ence relative to the same matter, through third persons, has been 
held admissible to show the relation of the parties.^" When 
necessary to protect the rights of innocent third parties who have 
dealt with the agent on the faith of his supposed agency, being 
led to believe such agency existed by acts of the principal, an 
agency may be conclusively presumed from the circumstances.^" 
But the mere fact that one has assumed to act as agent for another 
is not of itself sufficient to prove the relation of principal and 
agent, much less that the person so acting was fully authorized to 
do what he assumed to do,^' unless his acts were so open and 
under such circumstances as to imply, or charge the alleged princi- 
pal with, knowledge and assent on his part.^* 

§ 2928. Agency inferred from relation of parties. — It has 

been stated as a general rule that "where the agency is inferred 
from the relative situation of the parties, it is generally sufficient 
to establish the fact that the relationship in question was actually 
created ; this must be proved by the kind of evidence appropriate 
to the case."^' If the relation is one which may be created by 
parol, it may be shown, in many instances, as already intimated 
and as will more fully hereafter appear, by evidence of the act- 
ing of the servant or agent in that relation, with the knowledge 
and acquiescence of the principal, whether express or implied.^" 
But the mere relation of principal and agent ordinarily shows or 
establishes an agency no further than is necessary or proper and 
customary for the discharge of the duties belonging to it.^^ 

"Kitchens v. Ricketts, 17 Ind. 625; "Reynolds v. Collins, 78 Ala. 94; 

Eisenberg v. Matthews, 84 Minn. 76, Proctor v. Lows, 115 111. 138, 3 N. 

86 N. W. 870; Kent v. Addicks, 126 E. 569; Indiana, B. & W. R. Co. v. 

Fed. 112, 60 C. C. A. 660, writ of Adarason, 114 Ind. 282, 15 N. E. 5. 

certiorari denied, 192 U. S. 607, 48 See also, La Wall v. Groman, 180 Pa. 

L. ed. 585, 24 Sup. Ct. 851. St. 532, 37 Atl. 98, 57 Am. St. 662. 

''Barnett v. Glutting, 3 Ind. App. "2 Greenleaf Ev. (16th ed.), § 64. 

415, 29 N. E. 154. ^ Price v. Marsh, 1 Car. & P. 60; 

"Foss-Schneider Brew. Co. v. Mc- Rex v. Almon, 5 Bur. 2686; Garth 

Laughlin, 5 Ind. App. 415, 31 N. E. v. Howard, 5 Car. & P. 346, 8 Bing. 

838. 451; Story Agency, (9th ed.), § 55; 

"McDougald's Admr. v. Dawson's White v. Edgman, 1 Overt. (Tenn.) 

Exr., 30 Ala. 553; Reynolds v. Con- 19. 

tinental Ins. Co., 36 Mich. 131; In- ^ Grant v. Norway, 2 Eng. Law 

ternational &c. R. Co. v. Prince, 77 & Eq. 337; Friedlander v. Texas &c. 

Tex. 560, 14 S. W. 171, 19 Am. St. R. Co., 130 U. S. 416, 32 L, ed. 991, 9 

795. Sup. Ct. 570. See, to same effect. 



§ 2929 AGENCY. 124 

§ 2929. Habit and course of dealing. — Agency may be 
proved or inferred, in many instances, especially in transactions 
relating to affairs of trade and commerce, by or from evidence of 
custom or of the habit and course of dealing between the parties. 
This may show, either that there must have been an original ap- 
pointment or that there was a subsequent ratification." Many il- 
lustrations have already been given in treating of particular agents. 
Among them and others are cases in which juries have been ad- 
vised or permitted to infer, from evidence of the habit and course 
of dealing, the grant of authority to bind the principal by acting 
as his salesman,^^ broker,^* servant,^^ or general agent,^" and even 
to infer the grant of authority to his wife," to transact business 
in his behalf. "A single payment without disapprobation, for 
what a servant bought upon credit, has been deemed equivalent 
to a direction to trust to him in future f^ and the employer has 
been held bound in such case, though he sent him the second time 
with ready money, which the servant embezzled.^" In regard to 
the payment on moneys due, the authority to receive payment is 
inferred from the possession of a negotiable security; and, in 
regard to bonds and other securities not negotiable, the person 

Bank of Batavia v. New York &c. facie evidence of authority to sign a 

R. Co., 106 N. Y. 195; 12 N. E. 433, collateral guaranty. Watkins v. 

60 Am. Rep. 440. See also, Freestone Vince, 2 Stark. 324. 

V. Butcher, 9 Car. & P. 643; Dolan "* Whitehead v. Tuckett, 15 East 

V. Brooks, 168 Mass. 350, 47 N. E. 400. 

408. It is said, however, that when "* Hazard v. Treadwell, 1 Str. 506. 

the agency has once been entered ^"Burt v. Palmer, 5 Esp. 145; Peto 

upon, the law will presume, in the v. Hague, 5 Esp. 134. ■ See also, First 

absence of anything to the contrary, Nat. Bank v. Gobey, 152 Ala. 517, 44 

that whatever was done in further- So. 535. 

ance of the scheme which the agency "Lord v. Hall, 8 M. G. & S. 627; 

was created to effect, was done un- Palethorp v. Furnish, 2 Esp. 511, 

der and through such agency. Berg- note; Emerson v. Blondon, 1 Esp. 

ner v. Bergner, 219 Pa. St. 113, 67 142; Anderson v. Sanderson, 2 

Atl. 999. Stark, 180; Clifford v. Burton, 1 

^Ante, §§ 2927, 2928. See also, 2 Bing. 199; 1 Blackstone Comm. 430; 

Kent. Comm. (10th ed.) 614-615; Fenner v. Lewis, 10 Johns. (N. Y.) 

Foss-Schneider Brew. Co. v. Mc- 38. See, however, Barnett v. Glut- 

Laughlin, 5 Ind. App. 415, 31 N. E. ting, 3 Ind. App. 415, 29 N. E. 154, 

838. 927. 

"" Story Agency, § 55; Harding v. ^1 Blackstone Comm. 430; Story 

Carter, Park Ins., p. 4; Prescott v. Agency, (9th ed.), § 56; Bryan v. 

Flinn, 9 Bing. 19; Isbell v. Brink- Jackson, 4 Conn. 288. 

man, 70 Ind. 118. Evidence that the "^Rusby v. Scarlett, S Esp. 76; 

defendant's son, a minor, had in Hazard v. Treadwell, 1 Str. 506; 2 

three or four instances signed for Greenleaf Ev., (16th ed.), § 65; 

his father, and had accepted bills for Story Agency (9th ed.), § 56. 
him, has been held sufficient prima 



125 EVIDENCE IN AGENCY CASES. § 293O 

who is instructed to take the security, and to retain it in custody, 
is generally considered as entrusted with power to receive the 
money when it becomes due.""" So, even where one was attor- 
ney for a mortgagor, it was held that the fact that he also acted 
for the mortgagee in keeping the mortgage and placing it on 
record, and agreed to search the record for liens was sufficient 
to establish the relation of attorney and client between such attor- 
ney and mortgagee.^^ 

§ 2930. Course of dealing — Acts of agent in other transac- 
tions. — It follows from what has been said in the last preced- 
ing section and from similar statements in other sections as well, 
that evidence of the course of dealing between the parties through 
the alleged agent is generally relevant and admissible upon the 
question of agency and its extent.^^ Thus, in a recent case, it is 
said : "One of the vital questions of the case on trial was 
whether, in fact, the defendant was the plaintiff's agent, and as 
such made the loan for him. The plaintiff alleged in his com- 
plaint the affirmative of this proposition, and the defendant de- 
nied it by his answer, and followed it by the allegations we have 
quoted. The reply denied that the relation between the parties 
alleged in the answer was a true one. The burden of proof then 
was upon the plaintiff to show that the relation of the parties 
was that alleged by him. Now, if the defendant had acted as the 
plaintiff's agent in loaning money for him for some years prior 

"3 Elliott Ev., § 1633; Story other had actual knowledge that the 

Bills, § 415; Story Agency (9th ed.), act was not within the scope of the 

§§ 98, 104; Wolstenholm v. Davies, agent's authority. Wachter v. Phoe- 

Freem. Ch. 289 ; 2 Eq. Cas. Abr. 708, nix Assur. Co., 132 Pa. St. 428, 19 

709; Duchess of Cleveland v. Dash- Atl. 289, 19 Am. St. 600. Also, 

wood's Exrs., Freem. Ch. 249; Brocklesby v. Temperance Perma- 

Anonymous, 12 Mod. 564; Gerrard nent Bldg. Society, L. R. (1893), 3 Ch. 

V. Baker, cited in 1 Ch. Cas. 94; 130; 1 Am. & Eng. Ency. of Law 

Kingman v. Pierce, 17 Mass. 247. (2d ed.) 959, 960; Mechem Agency, 

When possession was obtained sur- § 282 ; Blanke Tea &c. Co. v. Trade 

reptitiously the owner was held not Exhibit Co., 5 Nebr. (unof.) 358, 98 

bound Lawson v. Nicholson, 52 N. N. W. 714; Jackson v. Emmens, 119 

J. Eq. 821, 31 Atl. 386. As a gen- Pa, St. 356, 13 Atl. 210. 
eral rule the principal is bound by '^LaWall v. Groman, 180 Pa. St. 

an act proved to have been done by 532, Z1 Atl. 98, 57 Am. St. 662. 
the agent within the apparent scope ^'^ See 1 Elliott Ev., § 172; Perry 

of his authority, which the principal v. Dwelling House Ins. Co., 67 N. 

permits to exist and on which an- H. 291, 33 Atl. 731, 68 Am. St. 668. 
other rightfully relies, unless the 



§ 2931 AGENCY. 126 

to the time in question, such fact and the number and character 
of the loans, and the course of dealing between the parties with 
reference thereto, would tend in a material degree to show that 
such agency still existed when the loan in question was made. 
Therefore the rejected evidence was material."^^ In another re- 
cent case it was held that, upon an issue as to the authority of an 
agent to bind his principal by a particular contract, evidence is 
admissible to show that he made other similar contracts which had 
been carried out by his principal, and that the principal had re- 
ferred to him as having authority to make contracts of that kind,^* 
and in the course of the opinion the court said that the accepted 
acts of an agent or officer of a corporation are always evidence to 
show the extent of his powers.^' So, as said in another case, 
"It is not necessary, in order to constitute a general agent, that 
he should have before done an act the same in specie with that 
in question. If he have usually done things of the same general 
character and effect with the assent of his principals, that is 
enough."^" But it has been held, on the other hand, in a recent 
case, that, on an issue as to whether a landlord's agent consented 
to the sale of certain seed to the defendant, and waived the land- 
lord's lien thereon, evidence of a waiver of the lien on other crops 
by the tenant consenting to their sale was not admissible." 

§ 2931. Declarations and admissions of agent. — The dec- 
larations of an alleged agent are not admissible to prove his 
agency,^* nor, in the first instance, to prove the extent of the 
agency and authority."" But, when the fact of agency is 

^' Eisenberg v. Matthews, 84 Minn, acting for his wife as undisclosed 

76, 86 N. W. 870. See also, Triller v. principal, see Shields v. Coyne, 148 

Saddle (Nebr.), 138 N. W. 728. Iowa 313, 127 N. W. 63, 29 L. R. 

="Kent V. Addicks, 126 Fed. 112, A. (N. S.) 472. 

60 C. C. A. 660. '' Western Inv. &c. Co. v. First Nat. 

"Sherman v. Fitch, 98 Mass. 59; Bank (Colo. App.), 128 Pac. 476; 

Bank of United States v. Dandridge, Griffin v. Societe Anonyme La Flor- 

12 Wheat. (U. S.) 64, 6 L. ed. 552; idienne, S3 Fla. 801, 44 So, 342; 

Merchants' Bank v. State Bank, 10 Abel v. Jarratt, 100 Ga. 732, 28 S. E. 

Wall. (U. S.) 604, 19 L. ed. 1008; 453; Harris Loan Co. v. Elliott &c. 

Martin v. Webb, 110 U. S. 7, 28 L. Typewriter Co., 110 Ga. 302, 34 S. 

ed. 49, 3 Sup. Ct. 428. E. 1003; Winch v. Baldwin, 68 Iowa 

'° Commercial Bank v. Norton, 1 764, 28 N. W. 62. See also, 1 Elliott 

Hill (N. Y.) 501. Ev., § 252; Cohn &c. Lumber Co. 

■"Wimp V. Early, 104 Mo. App. 85, v. Robbins, 159 Ala. 289, 48 So. 853, 

78 S, W, 343. For evidence held in- citing 3 Elliott Ev., § 1636. 

sufficient to show that a man was ^ Clark v, Folscroft, 67 Kans, 446, 



127 EVIDENCE IN AGENCY CASES. § 2932 

once established, the declarations of the agent are often ad- 
missible against the principal, especially when part of the res 
gestae.*" It is laid down as a general rule, in a recent case*^ 
in which declarations of the agent were held inadmissible, 
that the declarations, in order to bind the principal, must be 
made within the scope of his authority at the time of the trans- 
action, and be a part of the res gestae; and that if made after 
the transaction is completed, they are in the nature of hearsay and 
are mere narratives of a past transaction. It was also held that 
written declarations of the agent of an acrimonious character, and 
not relating to the matter in controversy, were inadmissible. But 
an agent cannot object to his own declarations being shown 
against himself even though they were made by him as agent, and 
not in his own behalf.*^ 

§ 2932. Admissions of principal. — "The principal may, of 
course, in a proper case, testify to the existence or non-existence 
of the agency as a fact, just as the agent may. So, the acts and 
admissions of the principal, properly tending to show the exist- 

li Pac. 86, and authorities cited; ly treated. This is true unless the 

Bacon v. Johnson, 56 Mich. 182, 22 court, in its discretion, admits the 

N. W. 276. evidence out of its usual order on 

" 1 Elliott Ev., §§ 2S2, S6S ; mono- promise to connect or the like, 

graphic note in 131 Am. St. 307; Woodbury v. Earned, 5 Gill (Minn.) 

Ball V. Bank of State, 8 Ala. 590, 271. Subsequent proof of agency 

42 Am. Dec. 649; Dexter v. Berge, may cure the error. Rowell v. Klein, 

76 Minn. 216, 78 N. W. 1111; Werth 44 Ind. 290, 15 Am. Rep. 235; Mc- 

V. OlUs, 61 Mo. App. 401; Grover v. Cormick v. Roberts, 36 Kans. 552, 13 

Morris, 12, N. Y. 473 ; Sowles v. Carr, Pac. 827. 

70 Vt. 630, 41 Atl. 581 ; State v. " Hogan v. Kelly, 29 Mont. 485, 75 

King, 64 W. Va. 546, 610, 63 S. E. Pac. 81. And see Baldwin v. Ashley, 

468, 495 ; Owens v. Northrup, 30 Wis. 54 Ala. 82 ; Hewes v. Germain Fruit 

482. There must, however, first be Co., 106 Gal. 441, 39 Pac. 853; First 

some evidence of agency. See Coon Nat. Bank v. North, 6 Dak. 136, 41 

V. Gurley, 49 Ind. 199; Mattis v. Hos- N. W. 736, 50 N. W. 621; Warren 

raer, 2,1 Ore. 523, 62 Pac. 17, 632; Live Stock Co. v. Farr, 142 Fed. 116, 

Cliquot's Champagne, 3 Wall. (U. 73 C. C. A. 340; Consolidated Ice &c. 

S.) 114, 18 L. ed. 116. To same ef- Co. v. Keifer, 134 111. 481, 25 N. E. 

feet. Southern Exp. Co. v. Todd, 56 799, 10 L. R. A. 696, 23 Am. St, 688 ; 

Fed. 104, 5 C. C. A. 432; Porter v. Trickey v. Clark, SO Ore. 516, 93 Pac. 

Robertson, 34 111. App. 74; Schoen- 457. See, also, the following recent 

hofen Brew. Co. v. Wengler, 57 111. cases for declarations or admissions 

App. 184; McCormick v. Roberts, id of agents held inadmissible: Axtell 

Kans. 552, 13 Pac. 827; Chellis v. v. Northern Pac. R. Co., 9 Idaho 

Cobb, 2>1 Kans. 558, IS Pac. 505; 392, 74 Pac. 1075; St. Louis, 1. M. & 

Long V. North British &c. Ins. Co., S. R, Co. v. Carlisle. 34 Tex. Civ. 

137 Pa. St. 335, 20 Atl. 1014, 21 Am. App. 268, 78 S. W. SS3. 
St. 879; note in 131 Am. St. 307, "Levner v. Leyner, 123 Iowa 185, 

where the whole subject is elaborate- 98 N. W. 628. 



§ 2933 AGENCY. 128 

ence of the agency and the authority of the agent, are admissible 
against himself." But it has been held that admissions of the 
principal generally as to the agency of a person are not proof of 
the agency at a particular time."** 

§ 2933. Notice to agent as notice to principal. — Evidence 
of notice to an agAit or that he has knowledge of a certain mat- 
ter is admissible in a proper case to charge his principal with such 
knowledge or notice. In other words, as it is sometimes stated, 
notice to the agent is notice to the principal.*' This rule is based 
not only upon the doctrine of the identity of the principal and 
agent, but also upon the theory that, as it is the duty of the agent 
to disclose to his principal all information which he may have 
respecting the subject-matter of the agency, it will be presumed 
that he has discharged that duty by giving the principal the in- 
formation in question. But, on this very theory, the rule is too 
broadly stated to be of universal application, and it has its excep- 
tions or limitations. The notice must have been received by the 
agent in the course of the agency, or at least under such circum- 
stances and at such a time that it may fairly be presumed or in- 
ferred to have been present or in the mind of the agent at the time 
of the transaction in question.*" As to the exact wording and 

"Arthur v. Card, 3 Colo. App. 133, ford v. Scott, 3 Madd. 34; Dresser 

32 Pac. 343; Phleger v, Ivins, 5 Har. v. Norwood, 17 C. B. (N. S.) 466; 

(Del.) 118; Mix v. Osby, 62 111. 193; Marion Mfg. Co. v. Harding, 155 

Norton v. Richmond, 93 111. 367; Ind. 648, 58 N. E, 194; Hyatt v. 

Haughton v, Maurer, 55 Mich. 323, Clark, 118 N. Y. 563, 23 N. E. 891; 

21 N. W. 426 ; Steel v. Solid Silver Jenkins Bros. Shoe Co. v. Renfrew, 

&c. Co., 13 Nev. 486; Wild v. New 151 N. Car. 323, 66 S. E. 212, 25 

York &c. Min. Co., 59 N. Y. 644; L. R. A. (N. S.) 231, and note; 

Wallace v. Nodine, 57 Hun (N. Y.) Houseman v. Girard &c. Assn., 81 

239, 32 N. Y. St. 659, 10 N. Y. S. Pa. St. 256. 

919. "Warrick v. Warrick, 3 Atk. 291; 

"3 Elliott Ev., § 1637; Irvin v. Dresser v. Norwood, 17 C, B. (N. 

Buckaloe, 12 Serg, & R. (Pa.) 35. S.) 466; Cooke v. Mesmer (Cal.),128 

"' Evans Pr. & Ag. 194, et seq.; Pac. 917; Yerger v. Barz, 56 Iowa 77, 

Corneille v. Pfeiffer, 26 Ind. App. 8 N. W. 769 ; First Nat. Bank v. Gun- 

62, 59 N. E. 188; Farmers' & Me- hus, 133 Iowa 409, 110 N. W. 611, 9 

chanics' Bank v. Butchers' & Drovers' L. R. A. (N. S.) 471. See Willis v. 

Bank, 16 N, Y. 125, 69 Am. Dec. 678; Vallette, 4 Mete. (Ky.) 186; Fair- 

Arff V. Star Fire Ins. Co., 125 N. Y. field Sav. Bank v. Chase, 72 Maine 

57, 25 N. E. 1073, 10 L. R.'A. 609, 226, 39 Am. Rep. 319; Innerarity v. 

21 Am. St. 721 ; Carpenter v. German Merchants' Nat. Bank, 139 Mass 332, 

&c. Ins. Co., 135 N. Y. 298, 31 N. E. 1 N. E. 282, 52 Am. Rep. 710; Tren- 

1015 ; Hill V. Nation Trust Co., 108 tor v. Pothen, 46 Minn. 298, 49 N. W. 

Pa. St. 1, 56 Am. Rep. 189; Story 129, 24 Am. St. 225 ; Constant v. Uni- 

Eq, Juris. (13th ed.), § 408, note 2; versity of Rochester, 111 N. Y. 604, 
Story Ag., § 140. See, also, Mount- 



129 



EVIDENCE IN AGENCY CASES. 



§ 2934 



application of this last qualification there is some conflict among 
the authorities. 

§ 2934. Ratification. — The general rule as to ratification 
of the acts of an agent, or alleged agent, has been laid down as 
follows : "One may ratify the previous unauthorized doing by 
another in his behalf, of any act which he might then and could 
still lawfully do himself, and which he might then and could still 
lawfully delegate to such other to be done."*^ Where the agency 
is to be proved by the subsequent ratification and adoption of the 
act by the principal, there must usually be evidence of previous 
knowledge on the part of the principal of all the material facts.*^ 
But when the principal is informed of what has been done in his 
behalf, at least where the relationship of principal and agent 
existed before the act, he is bound, if dissatisfied, to express his 
dissatisfaction within a reasonable time, and if he does not, his 



19 N. E. 631, 2 L. R. A. 734, 7 Am. 
St. 769; In re The Distilled Spirits, 
11 Wall. (U. S.) 3S6, 40 L. ed. 167; 
Brothers v. Bank of Kaukauna, 84 
Wis. 381, 54 N. W. 786, 36 Am. St. 
932; notes in 24 Am. St. 228, and 
38 Am. St. 770. See also, Lilly v. 
Hamilton Bank, 178 Fed, S3, 102 C. 
C. A. 1, 29 L. R. A. (N. S.) 558; 
Shaffer v. Milwaukee &c. Ins. Co., 17 
Ind. App. 204, 46 N. E. 557; Schle- 
singer v. Forest Products Co., 78 N. 
J. L. 637, 76 Atl. 1024, 30 L. R. A. 
(N. S.) 347; First Nat. Bank v. 
Lowther-Kaufman &c. Oil Co., 66 W. 
Va. 505, 66 S. E. 713, 28 L. R. A. (N. 
S.) 511, where agent's interest is ad- 
verse. As to notice to sub-agent, see 
also. Hoover v. Wise, 91 U. S. 308, 
23 L. ed. 392, But compare, gener- 
ally, Lea V. Iron Belt &c. Co., 147 
Ala. 421, 42 So. 415, 8 L. R. A. (N. 
S.) 279; Vulcan Detinning Co. v. 
American Can Co., 72 N. J. Eq. 387, 
€1 Atl, 339, 12 L. R. A. (N. S.) 102. 

"Mechem Agency, § 112; Zottman 
v. San Francisco, 20 Cal, 96, 81 Am. 
Dec. 96; O'Connor v. Arnold, 53 Ind. 
203.' See, also, generally, on the sub- 
ject of this section, "Ratification in 
the Law of Agency," 57 Cent, Law 
Jour. 463; notes in 5 Am. St, 109, 5 
Am, St. 618, and 79 Am, Dec, 387. 

*' Courteen v. Touse, 1 Campb. 43n. 
See also, Wilson v. Tummon, 6 Scott 

9 — Contracts, Vol. 4 



N. R. 894; Golinsky v. Allison, 114 
Cal. 458, 46 Pac. 295 ; Davis v. Tal- 
bott, 137 Ind. 235, Z(i N. E. 1098; 
Eggleston v. Mason, 84 Iowa 630, 
51 N. W. 1; Elk Valley Coal Co, v. 
Thompson (Ky,), 150 S. W. 817; 
Cram v. Sicl<el, 51 Nebr. 828, 71 
N. W. 724, 66 Am. St. 478; Belcher 
V. Manchester B. & L. Assn., 74 
N. J. L. 833, 67 Atl. 399; Nixon 
V. Palmer, 8 N. Y. 398, Seld. 
notes 146; Sherrill v. Weisiger 
Clothing Co., 114 N. Car. 436, 19 S. 
E. 365; Suderman-Dolson Co. v. 
Rodgers, 47 Tex. Civ. App. dl , 104 
S. W. 193; Owings v. Hull, 9 Pet. 
(U. S.) 607, 9 L. ed. 246; Bell v. 
Cunningham, 3 Pet. (U. S.) 69, 7 
L. ed. 606; Moyle v. Congregational 
Soc, 16 Utah 69, 50 Pac. 806; Hal- 
sey V. Monteiro, 92 Va. 581, 24 S. E. 
258; Haynes v. Tacoma &c. R. Co., 7 
Wash. 211, 34 Pac. 922. And com- 
pare In re Johnson, 102 Minn. 8, 112 
N. W. 894; Thompson v. Laboring- 
man's Mercantile &c. Co., 60 W. Va. 
42, 53 S. E. 908, 6 L. R. A, (N. S,) 
311. But not necessarily of the law. 
Kelley v. Newburyport &c. R. Co., 
141 Mass. 496, 6 N. E. 745. The bur- 
den of proof is on the party alleging 
knowledge and ratification. Moore 
v, Ensley, 112 Ala. 228, 20 So. 744; 
Cravens v, Gillilan, 63 Mo, 28; Ne- 
braska Weslyan University v. Parker, 



§ 2934 



AGENCY. 



130 



assent will be presumed.*' If the act of the agent was by deed, 
the ratification also must, according to the common law, be by 
deed.'"' Or, to state the rule in general terms, whenever the 
adoption of any particular form or mode is necessary to confer 
the authority in the first instance, the same mode must be pursued 
in the ratification." The acts and conduct of the principal, indi- 
cating an assent to the act of the agent, are generally interpreted 
liberally in favor of the latter, and slight circumstances may 
suffice to raise the presumption of a ratification, which becomes 
stronger in proportion as the conduct of the principal is incon- 
sistent with any other supposition.^^ Thus, where goods are sold 
without authority, if the owner receives the price, or pursues his 
remedy for it by action at law against the purchaser, or if any 
other act be done in behalf of one who afterward claims the bene- 
fit of it, this will usually constitute a ratification.**^ One of the 
most unequivocal methods of showing a ratification of an agent's 



52 Nebr. 453, 72 N. W. 470; Schoell- 
hamer v. Rometsch, 26 Ore. 394, 38 
Pac 344 

"Ward V. Evans, 2' Salk. 442; 
Jones V. Atkinson, 68 Ala. 167; Alex- 
ander V. Jones, 64 Iowa 207 ; Amory 
V, Hamilton, 17 Kans. 103 ; Farmers' 
&c. Bank v. Farmers' Bank, 49 Nebr. 
379, 68 N. W. 488; Singer Sew. 
Mach. Co. V. Barger (Nebr.), 138 
N. W. 741 ; Cairnes v. Bleecker, 
12 Johns. (N, Y.) 300; Kent v. 
Quicksilver Min. Co., 78 N. Y. 
159; Bredin v. Dubarry, 14 Serg. 
& R. (Pa.) 27; Litchfield's Exrs. v. 
Brown, 36 U. S. App. 130. If he as- 
sents, while ignorant of the facts, he 
may generally disaffirm when in- 
formed of them. Copeland v. Mer- 
cantile Ins. Co., 6 Pick. (Mass.) 198; 
Davis Lumber Co. v. Hartford Fire 
Ins. Co., 95 Wis. 226, 70 N. W. 84. 

""Agency (9th ed.), § 252; Athy 
Guardians v. Murphy (1896), 1 Ir. 
65; Blood v. Goodrich, 9 Wend. (N. 
Y.) 68, 24 Am. Dec. 121, 12 Wend. 
(N. Y.) 525. But see Mclntyre v. 
Park, 11 Gray (Mass.) 102, 71 Am. 
Dec. 690; Holbrook v. Chamberlin, 
116 Mass. 155, 17 Am. Rep. 146; 
Bless V. Jenkins, 129 Mo. 647, 31 S. 
W. 938. The modern tendency is to 
do away with the requirement of a 
seal.- 



■^Kozel v. Dearlove, 144 111. 23, 
32 N. E. 542; Spofford v. Hobbs, 29 
Maine 148, 48 Am. Dec. 521; Ham- 
mond v. Hannin, 21 Mich. 374, 4 Am. 
Rep. 490; Despatch Line of Packets 
V. Bellamy Mfg. Co., 12 N. H. 205, 
37 Am. Dec. 203; Boyd v. Dodson, 5 
Humph. (Tenn.) Zl . Otherwise it 
may be parol. Goss v. Stevens, 32 
Minn. 472, 21 N. W. 549; Taylor v. 
Connor, 41 Miss. 122. 97 Am. Dec. 
419. 

"'Story Agency (9th ed.), § 253; 
Ward V. Evans, 2 Salk. 442. 

■"Sims V. Smith, 99 Ind. 469, 50 
Am. Rep. 99; Henry v. Heeb, 114 
Ind. 275, 16 N. E. 606, 5 Am. St. 
613; Peters v. Ballistier, 3 Pick. 
(Mass.) 495. But if the action is 
discontinued or withdrawn, on dis- 
covering that the remedy is miscon- 
ceived, it may not be ratification, and 
acceptance of benefits of an act with- 
in the authority of the agent will not 
ordinarily be construed as a ratifica- 
tion of acts outside the scope of the 
agent. Robinson v. Nipp, 20 Ind. App. 
156, SO N. E. 408. See also. Lent v. 
Padeford, 10 Mass. 230, 6 Am. Rep. 
119. But see Episcopal Charitv Soc. 
v. Episcopal Church, 1 Pick. (Mass.) 
372; Kupfer v. South Parish, 12 
Mass. 185; Odiorne v. Maxcv, 13 
Mass. 178; Herring v. Polley, 8 



131 EVIDENCE IN AGENCY CASES. § 2934 

act is the bringing of an action based upon it." Payment of a 
loss upon a policy subscribed by an agent is evidence that he had 
authority to sign it/'^ Proof that one was in the habit of signing 
similar policies in the name and as the agent of another, and with 
his knowledge, is also evidence of his authority to sign the partic- 
ular policy in question f^ and it has also been held that if the prin- 
cipal has been in the habit of paying the losses upon policies so 
signed in his name, this is sufficient proof of the agency, though 
the authority was not conferred by an instrument in writing/' 
Where the principal in an action against him on a policy signed by 
the agent used the affidavit of the agent to support a motion to 
put off the trial, in which the agent stated that he subscribed the 
policy for and on account of the defendant, this was held a rati- 
fication of the signature.^^ Long acquiescence of the principal, 
after knowledge of the act done for him by another, will also, in 
many cases, be sufficient evidence of a ratification.^^ If no 
agency actually existed, the silence or mere acquiescence of the 
principal may well be taken as proof of a ratification, although 
it is not every case in which silence alone will be sufficient. "If 
the silence of the principal is either contrary to his duty, or has 
a tendency to mislead the other side, it is generally conclusive. 
Such, it is said, is the case among merchants, when notice of the 
act done is given by letter which is not answered in a reasonable 
time.'"'" But the ratification of one unauthorized act is not neces- 
sarily the ratification of another distinct act, nor is the acceptance 

Mass. 361 ; Pratt v. Putman, 13 Mass. cient to show that the work was au- 

361 ; Fisher v. Willard, 13 Mass. 379 ; thorized by the city, and it was held 

Copeland v. Mercantile Ins. Co., 6 hable for injury to a traveler because 

Pick. (Mass.) 198. of the neghgent manner in which the 

" McLeod V. Despain, 49 Oreg. 536, work was done. Goshen v. Alford, 

90 Pac. 492, 92 Pac. 1088, 19 L. R. A. 154 Ind..S8, SS N. E, 27. 

(N S.) 276, 24 Am. St. 1066. ""Lynch v. Smyth, 25 Colo. 103, 

°=Courteen v. Touse, 1 Campb. 43. 54 Pac. 634; First Nat. Bank v. 

=" Neal V Erving, 1 Esp. 61. See, Fricke, 75 Mo. 178, 42 Am. Rep. 397. 

also, Frankhn Fire Ins. Co. v. Brad- See, also, McGoech v. Hooker 11 111. 

ford 201 Pa. St. 32, 50 Atl. 286, 55 App. 649; Cairnes v. Bleecker, 12 

L. R. A. 408, 88 Am. St. 770. Johns. (N. Y.) 300. 

"Haughton v. Ewbank, 4 Campb. ™3 Elhott Ev., § 1639. But see as 

88 Compare Farmer's Mut. Ins. Co. to silence held msufficient to ratify 

V Taylor 73 Pa. St. 342. the act of a stranger or mtermeddler, 

"'Johnson v. Ward, 6 Esp. 47. So Uniontown Grocery Co. v. Dawson, 

where a city had paid for work on its 68 W. Va. 332, 69 S. E. 845, Ann. 

streets, done under the direction of Cas. 1912B. 148, note, 
the city marshal, this was held suffi- 



§ 2935 AGENCY. 132 

of the result of a series of unauthorized acts of one kind the cre- 
ation of an impHed agency to do an entirely different thing. "^ It 
is held that one cannot claim the benefit by ratification of an act 
not in his name nor for his use or benefit."^ 

§ 2935. Revocation and termination of agency. — The evi- 
dence of agency to charge the principal may be rebutted by show- 
ing that his authority was revoked and due notice thereof given or 
had, prior to the act in question."'' But if he was appointed by 
writing, and the written authority was still left in his hands, and 
he afterward exhibited it to a third person, who dealt with him 
on the faith of it without notice of the revocation, or the knowl- 
edge of any circumstances sufficient to have put him on his 
guard, the act of the agent within the scope of the written author- 
ity, bound the principal."* And, generally, where notice is not 
given to third persons and the circumstances are such that they 
have a right to rely on the continuance of the agency until noti- 
fied, the acts of the agent within the scope of his apparent con- 
tinuing authority will usually bind the principal."'^ Where, how- 
ever, the agency is not coupled with an interest, and there is noth- 

" Hoffmaster v. Black, 78 Ohio St. ^ Anonymous v. Harrison, 12 Mod. 
1, 84 N. E. 423, 125 Am. St. 679. See 346; Quinn v. Dresbach, 75 Cal. 159, 
also, for other cases in which it was 16 Pac. 762, 7 Am. St. 138; Fellows v. 
held that there was no ratification, Hartford &c. Steamboat Co., 38 
Findlay v. Hildenbrand, 17 Idaho Conn. 197; Foellinger v. Leh, 110 Ind. 
403, 105 Pac. 790, 29 L. R. A. (N. 238, 11 N. E. 289; ^iIcNeilly v. Con- 
S.) 400 and note; Foote v. Cotting, tinental Life Ins. Co., 66 N. Y. 23; 
195 Mass. 55, 80 N. E. 600, 15 L. R. Insurance Co. v. McCain, 96 U. S. 
A. fN. S.) 693, and note; John Gund 84, 24 L. ed. 653; Johnson v. Chris- 
Brew. Co. V. Fourtelotte, 108 Minn, tian, 128 U. S. 374, 22 L. ed. 412, 9 
71, 121 N. W. 417, 29 L. R. A. (N. Sup. Ct. 87. So, if, under such cir- 
S.) 210, and note. cumstances, one properly makes a 

°' Virginia Pocahontas Coal Co. v. payment to the agent, the principal 

Lambert, 107 Va. 368, 58 S. E. 561, can not hold the person making it 

and cases cited, 122 Am. St. 860. liable therefor. Ulrich v. McCormick, 

"Gunter v. Stuart, 87 Ala. 196, 6 66 Ind. 243; Packer v. Hinckley Lo- 

So. 266, 13 Am. St. 21 ; Clark v. Mul- comotive Works, 122 Mass. 484. To 

lenix, 11 Ind. 532; Johnson v. same effect, Meyer v. Hehner, 96 111. 

Youngs, 82 Wis. 107, 51 N. W. 1095. 400. It has been held that after the 

Notice may be given by the agent, agency is established the burden of 

and may also be implied. Vail v. Jud- showing a change of the relation be- 

son, 4 E. D. Smith (N. Y.) 165 ; Will- fore the transaction in question is 

iams V. Birbeck, Hoff. Ch. (N. Y.) upon the party affirming change. 

359. Bergner v. Bergner, 219 Pa. 113, 67 

"Beard v. Kirk, 11 N. H. 397. But Atl. 999. 
see, where notice was given, Clark 
V. Muilenix, 11 Ind. 532. 



^33 



EVIDENCE IN AGENCY CASES. 



§ 2935 



ing else to prevent a revocation, it may be expressed or implied, 
and may be by parol even where the authority was in writing."" 
But it has been held that the common-law rule that notice to the 
agent is necessary to revoke a power of attorney to convey real 
estate is not abrogated by a statute merely authorizing the record 
of such a power and providing that, if recorded, the instrument 
of revocation must also be recorded, and that merely recording a 
revocation of a recorded power, without notice to the agent, does 
not revoke his authority."' 



°° Copeland v. Mercantile Ins. Co., 
6 Pick. (Mass.) 198; Rochester v. 
Whitehouse, IS N. H. 468; Brook- 
shire V. Brookshire, 30 N. Car. 74, 47 
Am. Dec. 341. As to revocation or 
termination by death, disposition of 
the property or subject matter, and 
the like, see McClaskey v. Barr, SO 
Fed. 712; Johnson v. Wilcox, 2S Ind. 
182; Lincoln v. Emerson, 108 Mass. 
87; Gait v. Galloway, 4 Pet. (U. S.) 
332, 7 L. ed. 876. Also Companari 
V. Woodburn, IS C. B. 400, 80 E. C. 



L. 400; Walker v. Denison, 86 111. 
142; Simonton v. First Nat. Bank, 24 
Minn. 216; Comley v. Dazian, 114 N. 
Y. 161, 21 N. E. 13S. See, also, as to 
dissolution of partnership authorized 
to act as agent terminating the 
agency, Larson v. Newman, 19 N. 
Dak. 153, 121 N. W. 202, 23 L. R. A. 
(N. S.) 849, and note. 

"Best V. Gunther, 12S Wis. 518, 104 
N. W. 82, 918, 1 L. R. A. (N. S.) 
577, 110 Am. St. 8Sln. But, compare, 
Arnold v. Stevenson, 2 Nev. 234. 



TITLE TWO 

ARBITRATION AND AWARD 



CHAPTER LXVI. 



ARBITRATION. 



§2940. Scope. 

2941. Agreements for submission, 

effect and necessity. 

2942. Manner and form of submis- 

sion. 

2943. What may be submitted. 

2944. Who may submit to arbitra- 

tion. 

2945. Requisites of submission. 

2946. Amendment of submission. 

2947. Revocation of submission. 

2948. Effect of submission. 

2949. Construction of submission. 

2950. Who may be arbitrators. 

2951. Appointment and oath. 

2952. Authority and power of arbi- 

trators. 

2953. Compensation and liability of 

arbitrators. 



§ 2954. Proceedings before arbitrators 
in general — Presence at 
meetings. 

2955. Right to hearing before ar- 

bitrators — Extent of right. 

2956. Time and place of hearing 

before arbitrators. 

2957. Notice to parties of meetings 

of arbitrators. 

2958. Conduct of hearing by arbi- 

trators — Witnesses and evi- 
dence. 

2959. Manner of reaching decision 

by arbitrators — Unanimity. 

2960. Umpire — Method of appoint- 

ment. 

2961. Umpire — His authority. 



§ 2940. Scope. — Arbitration is a method of settling dis- 
putes '.and differences between parties by referring them to 
judges or arbitrators of their own choice, instead of bringing ac- 
tions or suits in regularly constituted courts.^ There are three 
general classes of arbitration proceedings; First, where in the 



'- See Elliott Ev., § 1654 ; In re Cur- 
tis, 64 Conn. 501, 30 Atl. 769, 42 Am. 
St. 200; Fargo v. Reighard, 13 Ind. 
App. 39, 39 N. E. 888, 41 N. E. 74; 
Miller v. Brumbaugh, 7 Kans. 343; 
Duren v. Getchell, 55 Maine 241; 
Boyden v. Lamb, 152 Mass. 416, 25 
N. E. 609; Backus v. Coyne, 35 Mich. 
5; Reily v. Russell, 34 Mo. 524; Mil- 
ler V. Junction Canal Co., 53 Barb. 



(N. Y.) 590, affd. 41 N. Y. 98; 
Gardner v. Masters, 56 N. Car. 462; 
Henderson v. Beaton, 52 Tex. 29 ; 
Wood v. Seattle, 23 Wash. 1, 62 Pac, 
135, 52 L. R. A. 369. See Guild \. 
Atchison, T. & S. F. R. Co., 57 Kans, 
70, 45 Pac. 82, 33 L. R. A. 77. 57 
Am. St. 312, for distinction between 
arbitrators and appraisers. Carmick's 
Case, 2 Ct. CI. (U. S.) 126. 



134 



135 ARBITRATION. § 294O 

absence of statute, or without regard to statute, the parties to a 
controversy submit it for decision to mutually chosen arbitra- 
tors.^ In such cases the award cannot be enforced by either the 
arbitrators or the successful party, but the successful party may 
bring an action on the award instead of the original cause of ac- 
tion, and the award is conclusive evidence in his favor, unless 
impeached.* Second, where, by statute, authority is given to 
parties to a controversy not in court to submit it to arbitrators, 
whose award may on motion be entered as the judgment of a 
designated court, or the submission may be entered as a rule of 
court by agreement in the first instance.* In this case the award 
is enforced by the court as a judgment is enforced.^ Third, 
where a court in which a suit or action is pending by consent of 
the parties refers the controversy to arbitrators, selected by the 
parties or by the court, for determination, which method of arbi- 
tration is known as a reference.* The right to a reference is 
given by the common law,'' but the method of procedure is often 
regulated by statute,* and a case which is not brought within the 
statutory provisions as to references must be held amenable to 
the rules which govern arbitration," and the award of the arbi- 
trators in such a case is not subject to supervision and amend- 
ment by the court as in case of a reference perfected under the 
statute." The present article deals more particularly with the 
first and second classes of arbitrations and their relation to the 
general subject of contracts. 

A submission is a contract by which parties agree to refer mat- 
ters in dispute between them to other persons chosen by them for 
decision, and to be bound by their award.^^ An arbitrator is a 
person chosen by the parties to a controversy to whom the mat- 

^ See succeeding sections. ' See citations under notes 4 and 5, 

'See §§ 2977, 2982. § 2940. 

'See §§ 2966, 2967, 2982. "Rathbone v. Lownsbury, 2 Wend. 

°See §2982. (N. Y.) 595; Merritt v. Thompson, 

' Miller v. Brumbaugh, 7 Kans. 343. 27 N. Y. 225 ; Hovey v. Hovey, 46 

'Hardin v. Almand, 64 Ga. 582; Hun (N. Y.) 71, 10 N. Y. St. 774. 

Higgins V. Kinneady, 20 Iowa 474; "See cases cited in notes 32, 33, 34, 

Gushing V. Babcock, 38 Maine 452 ; § 2942. Shaw v. State, 125 Ala. 80, 28 

Phillips V. Shipley, 1 Bland. (Md.) So. 390; Thornton v. McGormick, 75 

516; French v. Shackford, 5 N. H. Iowa 285, 39 N. W. 502; Frost v. 

143; Bollmann v. Bollmann, 6 S. Gar. Smith's Heirs, 7 J. J. Marsh (Ky.) 

29; Shermer v. Beale, 1 Wash. (Va.) 126; Stephenson v. Price, 30 Tex. 715. 

11 "'Whitcher v. Whitcher, 49 N. H. 



2940 



ARBITRATION AND AWARD. 



136 



ters in dispute are submitted for decision.^^ An umpire is one 
who is to decide the matter if the original arbitrators fail to 
agree/" The award is the decision or judgment of the arbitra- 
tors." The making of this award, that is, the announcing and 
publishing of the decision, is a judicial act,^^ and the award pai'- 
takes of the nature of a judgment in many ways, though it also 
has many attributes of a contract, being, however, of a higher 
nature than the ordinary contract.^'' An arbitration is a proceed- 
ing inter partes, and not ex parte,^^ and, though not a suit or ac- 
tion, is held to be a quasi-judicial proceeding.^^ Statutes regulat- 
ing arbitration do not abrogate the common-law method which 
has been handed down as an ancient heritage, but leave the 
method optional to the parties.^" Many cases hold that where a 
statutory arbitration has been attempted, and the statutory pro- 
visions have not been followed sufficiently to enable the award 
to be entered as a judgment of the court, the award of the arbi- 
trators will not be enforced as a common-law award, ^° but the 
contrary rule has probably the weight of atithority in its favor. ^^ 



176, 6 Am. Rep. 486; Garr v. Gomez, 
9 Wend, (N. Y.) 649; MiUsaps v. 
Estes, 137 N. Car. 535, SO S. E. 227, 
70 L. R. A. 170, 107 Am. St. 496. See 
note 22, § 2942. 

"Fisher v. Towner, 14 Conn. 26; 
White Star Min. Co. v. Hultberg, 220 
111. 578, n N. E. 327 ; Perry v. Cobb, 
88 Maine 435, 34 Atl. 278, 49 L. R. 
A. 389; Vaughn v. Graham, 11 Mo. 
575; Garr v. Gomez, 9 Wend. (N. 
Y.) 649; State v. Appleby, 25 S. Car. 
100. See also. Mobile v. Wood,^ 95 
Fed. 537; Silver v. Connecticut River 
Lumber Co., 40 Fed. 192. 

"Keans v. Rankin, 2 Bibb. (Ky.) 
88. 1 Bacon Abr. tit. Arb, & Aw, (D) 
317. See § 2950. 

"Silver v. .Connecticut R. Lumber 
Co., 40 Fed. 192 ; Tompkins v. Gerry, 
52 111. App. 592; Fargo v. Reighard, 
13 Ind. App. 39, 39 N. E. 888, 41 N. 
E. 74; Hoff V. Taylor, 5 N. J, L. 
976; Garr v. Gomez, 9 Wend. (N. 
Y.) 649; Greene &c. R. Co. v. Moore, 
64 Pa. St. 79; Henderson v. Beaton, 
52 Tex. 43; Richards v. Smith, 33 
Utah 8, 91 Pac. 683. 

"Story v. Elliot, 8 Cow. (N. Y.) 
27, 18 Am. Dec. 423. 

"Johnson v. Maxey, 43 Ala. 521; 



Groat V. Pracht, 31 Kans. 656, 3 Pac. 
274; Searles v. Lum, 81 Mo. App. 
607; Smith v. Lockwood, 7 Wend. 
(N. Y.) 241; Dixon v. Morehead, 
Add. (Pa.) 216; Olston v. Oregon 
Water Power & R. Co., 52 Ore. 343, 
96 Pac. 1095, 97 Pac. 538, 20 L. R. A. 
(N. S.) 915; Celley v. Gray, Zl Vt. 
136; Blood v. Bates, 31 Vt. 147. 

" Graham v. Graham, 12 Pa. St. 
128, 

"In re Southern Pac. Co., 155 Fed. 
1001; Shively v. Knoblock, 8 Ind. 
App. 433, 35 N. E. 1028. 

^° See cases cited in notes 74 and 
75 in § 2982. Shawhan v. Baker 
(Mo.), 150 S. W. 1096. 

'" See cases cited in note 77, § 2982. 
Williams v. Walton, 9 Cal. 142; S. 
Carolina R. Co. v. Moore, 28 Ga. 398, 
73 Am. Dec. 778; Sargent v. Hamp- 
den, 32 Maine 78; Deeriield v. Arms, 
20 Pick. (Mass.) 480, 32 Am. Dec. 
228; Nay v. Boston &c. R. Co., 192 
Mass. 517, 78 N. E. 547; Holdridge v. 
Stowell, 39 Minn. 360, 40 N. W. 259; 
Benjamin v. Benjamin, 5 W. & S. 
(Pa.) 562; Allen v. Chase, 3 Wis. 
249. 

^Fink V. Fink, 8 Iowa 313; Gal- 
loway v. Gibson, 51 Mich 135, 16 N. 



137 ARBITRATION. § 294 1 

§ 2941. Agreements for submission — Effect and necessity. 

— A submission or agreement to refer the particular matters in 
dispute to arbitrators for decision is essential to any arbitration 
proceedings, and forms the basis thereof.^ The submission must 
have all the elements of any contract, including the meeting of 
the minds of the parties.^ Either agreements to submit to arbi- 
tration pending disputes or provisions in contracts with regard 
to the arbitration of future controversies are valid, and sanc- 
tioned by the courts, in so far as the jurisdiction of the courts is 
not ousted by the contract.^ Under this rule a contract will be 
upheld which makes it a condition precedent to a right of action 
that an arbitration shall be had to determine certain questions 
concerning the liability of the parties, such as the amount to be 
paid, or the time of settlement, for this does not deprive the 
courts of jurisdiction.* A statute which makes arbitration com- 
pulsory, but permits appeal, is valid,^ but neither by contract 
nor statute can an arbitration be made absolutely final on the 
parties, cutting off appeal to the courts, for such contract or 

W. 310; Halliburton v. Flowers, 12 v. Hon, 66 Nebr. 555, 92 N. W. 746, 

Heisk. (Tenn.) 25; Dockery v. Ran- 60 L. R. A. 436, 103 Am. St. 725. 

dolph (Tex.), 30 S. W. 270. See cases * See 2 Am. & Eng. Encyc. Law. 

cited in note 75, § 2982. (2d ed.) pp. 573-577, for long list 

'The Glencairn, 78 Fed. 379; Pog- of authorities. See cases cited under 

genborg v. Conniff, 29 Ky. L. 912, 96 note 10, § 2941. Scott v. Avery, S H. 

S. W. 547; Burghardt v. Turner, 12 L. Cas. 811, 2 Jur. (N. S.) 815, 25 L. 

Pick. (Mass.) 534; Stokely v. Rob- J. Exch. 308, 4 Wkly. Rep. 746, 8 Exch. 

inson 34 Pa. St. 315. 487; Edwards v. Aberayron Mut. 

"Triplett v. Sims, 89 Mo. App. 326. Ship Ins. Society, 1 Q. B. Div. 563, 34 

= Tennessee Coal, I. & R. Co. v. L. T. 457; Horton v. Sayer, 4 H. & 

Roussell, 155 Ala. 435, 46 So. 866, 130 N. 643; Clement v. British-American 

Am. St. 56; Knoche v. Chicago, M. Assur. Co., 141 Mass. 298, 5 N. E. 

& St P R Co., 34 Fed. 471; Mas- 847; Randall v. American Fire Ins. 

terson v. Masterson, 22 Ky. L. 1193, Co., 10 Mont. 340, 25 Pac. 953, 24 Am. 

60 S. W. 301 ; Hood V. Hartshorn, 100 St. SO; Jones v. Enoree Power Co. 

Mass. 117, 1 Am. Rep. 89; Anderson (S. Car.), 75 S. E. 452. See also, 

V. Meislahn, 12 Daly (N. Y.) 149; Fisher v. Merchants' Ins. Co., 95 

Commercial Union Assur. Co. v. Maine 486, SO Atl. 282, 85 Am. St. 

Hocking, 115 Pa. St. 407, 8 Atl. 589, 428; Commercial Union Assur. Co. 

2 Am. St. 562; note 2 Am. St. 566 v. Hocking, 115 Pa. St. 407, 8 Atl. 

et seq. An agreement between parties 589, 2 Am. St. 562 and note. See note 

to a contract that neither shall main- 103 Am. St. 734. „ _ ^ „ _ 

tain a suit thereon after breach,— all "Pittsburg, C. & St. L. R Co. v. 

dififerences to be settled by arbitra- Garrett, 50 Ohio St. 405, 34 N E. 

tion— is without binding force, as 493 ; McDonald v. Schell 6 S&K. 

tending to oust the courts of their (Pa.) 240; Cutler v. Richley, 151 Pa. 

jurisdiction. Hartford Fire Ins. Co. St. 195, 25 Atl. 96. 



2941 



Arbitration and award. 



138 



statute will not be enforced in law or equity." Though a con- 
tract for arbitration will not be specifically enforced in equity, 
usually an action in damages will lie for its breach.^ Where par- 
ties agree, the court may submit matters to arbitrators under a 
master, and render relief according to their award.^ Where par- 
ties have carried out an agreement to arbitrate which would not 
have been enforced originally, the courts have often refused to 
entertain an action on the original matters of difference. ° The 
question as to whether an arbitration is a condition precedent 
to an action arises most often under insurance policies where it 
is provided that the amount of loss shall be determined by arbi- 
trators, or in building contracts where the determination of the 
amount or character of the work is left to a particular person, 
or persons.^" The condition precedent in such cases may be 



° Hartford Fire Ins. Co. v. Hon, 
66 Nebr. 5SS, 92 N. W. 746, 
60 L. R. A. 436, 103 Am. St. 725. See 
also, In re Compulsory Arbitration, 9 
Colo. 629, 21 Pac. 474; Supreme 
Council V. Garrigus, 104 Ind. 133, 3 
N. E. 818, 54 Am. Rep. 298; Noyes v. 
Marsh, 123 Mass. 286; White v. Mid- 
dlesex R. Co., 135 Mass. 216, 15 Am. 
& Eng. R, Cas. 131; March v. East- 
ern R. Co., 40 N. H. 548, 11 Am. Dec. 
732; Greason v. Keteltas, 17 N. Y. 
491; People v. Haws, 37 Barb. (N. 
Y.) 440, IS Abb. Pr. (N. Y.) 115, 
24 How. Pr. (N. Y.) 148; Delaware 
&c. Canal Co. v. Pennsylvania Coal 
Co., 50 N. Y. 250; Conner v. Drake, 
1 Ohio St. 166; Tobey v. Bristol 
County, 3 Story (U. S.) 800, Fed. 
Cas. No. 14065; Perkins v. United 
States Electric Light Co., 16 Fed. 513, 
21 Blatchf. (U. S.) 308. See note 15 
L. R. A. 142. 

'Livingston v. Ralli, 24 L. J. Q. 
B. 269, 5 El. & Bl. 132, 85 E. C. L. 
132 ; Nute v. Hamilton Mut. Ins. Co., 
6 Gray (Mass.) 174; Haggart v. 
Morgan, 5 N. Y. 422, 55 Am. Dec. 
350; Gray v. Wilson, 4 Watts (Pa.) 
39. See note IS L. R. A. 142. Cogs- 
well V. Cogswell (Wash.), 126 Pac. 
431. See cases cited in note 93 
§ 2947. Cooke v. Miller, 25 R. I. 
92, 54 Atl. 927, 1 Am. & Eng. Ann. 
Cas. 30, holds that equity will en- 
force a contract in which there has 
been part performance, and an arbi- 



tration, which is not a material part, 
but an incident of the contract, has 
failed. See note 1 Am. & Eng. Ann. 
Cas. 30. 

° Conner v. Drake, 1 Ohio St. 166. 

" Cleworth v. Pickford, 7 M. & W. 
314; Smith v. Boston &c. R. Co., 36 
N. H. 458; Smith v. Compton, 20 
Barb. (N. Y.) 262. 

" Elliott V. Royal Exch. Assur. Co., 
L. R. 2 Exch. 237 ; Holmes v. Richet, 
56 Cal. 307, 38 Am. Rep. 54; Birm- 
ingham Fire Ins. Co. v. Pulver, 126 
111. 329, 18 N. E. 804, 9 Am. St. 598; 
Continental Ins. Co. v. Valland- 
ingham, 116 Ky. 287, 25 Ky. L. 
468, 76 S. W. 22, 105 Am. St. 218. 
See Kelly v. Liverpool &c. Ins. Co., 94 
Minn. 141, 102 N. W. 380, 110 Am. 
St. 351 ; Clement v. British Am. Assur. 
Co., 141 Mass. 298, 5 N. E. 847 ; Wegg- 
ner v. Greenstine, 114 Mich. 310, 12 N. 
W. 170; March v. Eastern R. Co., 40 
N. H. 548, 11 Am. Dec. 732; Hamil- 
ton V. Liverpool &c. Ins. Co., 136 U. 
S. 242, 34 L. ed. 419, 10 Sup. Ct. 945 ; 
Chapman v. Rockford Ins. Co., 89 
Wis. 572, 62 N. W. 422, 28 L. R. A. 
40S. See Graham v. German-.\meri- 
can Ins. Co., 75 Ohio St. 374, 79 
N. E. 930, 15 L. R. A, (N. S.) lOSS, 9 
Am. & Eng. Ann. Cas. 79, and ex- 
tended note on Arbitration as con- 
dition precedent to action on in- 
surance policy. See note 8 Am. & 
Eng. Ann. Cas. 171 et seq. See note 2 
Am. St. 566. 



139 



ARBITRATION. 



2941 



waived.^^ A denial of liability on other grounds than failure to 
arbitrate/" or a refusal to arbitrate/^ or a submission to a differ- 
ent kind of arbitration is a waiver." If the necessity for arbitra- 
tion depends on a request of one of the parties, failure to make 
such request waives the right to ai-bitration.^° Where the arbitra- 
tors disagree, without fault of either party, it has been held that 
the insured may bring an action." A mere agreement to submit is 
not a bar to an action or suit concerning the matter submitted,^^ 



" Providence Washington Ins. Co. 
V. Wolf,' 168 Ind. 690, 80 N. E. 26, 
120 Am. St. 395 ; Continental Ins. Co. 
V. Vallandingham, 116 Ky. 287, 25 
Ky. L. 468, 76 S. W. 22, 105 Am. St. 
218; Fisher v. Merchants' Ins. Co., 
95 Maine 486, 50 Atl. 282, 85 Am. St. 
428. See note 8 Am. & Eng. Ann. 
Cas. 174; Hamilton v. Connecticut 
Fire Ins. Co., 46 Fed. 42, affd. 59 
Fed. 258, 8 C. C. A. 114; Phenix Ins. 
Co. V. Stocks, 149 111. 319, 36 N. E. 
408; Hutchinson v. Liverpool &c. Ins. 
Co., 153 Mass. 143, 26 N. E. 439, 10 
L. R. A. 558 ; Wainer v. Milf ord Mut. 
Fire Ins. Co., 153 Mass. 335, 26 N. 
E. 877, 11 L. R. A. 598; Randall v. 
American Fire Ins. Co., 10 Mont. 340, 
25 Pac. 953, 24 Am. St. 50; Everett 
V. London &c. Ins. Co., 142 Pa. St. 
332, 21 Atl. 819, 24 Am. St. 499. 

'"Farnum v. Phoenix Ins. Co., 83 
Cal. 246, 23 Pac. 869, 17 Am. St. 233 ; 
Western & Atlantic Pipe Lines v. 
HoraG Ins. Co., 145 Pa. 346, 22 Atl. 
665, 27 Am. St. 703 ; Savage v. Phoe- 
nix Ins. Co., 12 Mont. 458, 31 Pac. 
66, 33 Am. St. 591; Home Fire Ins. 
Co. V. Kennedy, 47 Nebr. 138, 66 N. 
W. 278, 53 Am. St. 521. See note 
8 Am. & Eng. Ann. Cas. 303. Phenix 
Ins. Co. V. Stocks, 149 111. 319, 36 N. 
E. 408. 

"Western Assur. Co. v. Hall, 
120 Ala. 547, 24 So. 936, 74 Am. St. 
48; Continental Ins. Co. v. Wilson, 
45 Kans. 250, 25 Pac. 629, 23 Am. St. 
720; Brock v. Dwelling House Ins. 
Co., 102 Mich. 583, 61 N. W. 67. 26 
L. R. A. 623, 47 Am. St. 562; Steph- 
ens V. Union Assur. Soc, 16 Utah 22, 
SO Pac. 626, 61 Am. St. 595. See also. 
Continental Ins. Co. v. Wilson, 45 
Kans. 250, 25 Pac. 629, 23 Am. St. 



720; Walker v. German Ins. Co., 51 
Kans. 725, ZZ Pac. 597; Wainer v. 
Milford Mut. Fire Ins. Co., 153 Mass. 
335, 26 N. E. 877, 11 L. R. A. 598; 
Morley v. Liverpool &c. Ins. Co., 85 
Mich. 210, 48 N. W. 502; Bristol v. 
Bristol & W. Waterworks, 19 R. L 
413, 34 Atl. 359, 32 L. R. A. 740. 

"Adams v. New York Bowery F. 
Ins. Co., 85 Iowa 6, 51 N.. W. 1149. 

^ German-American Ins. Co. v. 
Steiger, 109 111. 254; Nurney v. Fire- 
men's Fund Ins. Co., 63 Mich. 633, 30 
N. W. 350, 6 Am. St. 338; Phoenix 
Ins. Co. V. Badger, 53 Wis. 283, 10 
N. W. 504. 

" Bernhard v. Rochester German 
Ins. Co., 79 Conn. 388, 65 Atl. 134, 
8 Am. & Eng. Ann. Cas. 298 and note ; 
Jerrils v. German-American Ins. Co., 
82 Kans. 320, 108 Pac. 114, 20 Am. & 
Eng. Ann. Cas. 251 and note. Contra, 
Grady v. Home F. & M. Ins. Co., 27 
R. I. 435, 63 Atl. 173, 4 L. R. A. (N. 
S.) 288 and note. 

"Livingston v. Ralli, 24 L. J. Q. B. 
269, 5 El. & Bl. 132, 85 E. C. L. 132; 
Thompson v. Charnock, 8 T. R. 139; 
Rowe V. Williams, 97 Mass. 163; 
Chadwick v. Phoenix Accident and 
Sick Benefit Assn., 143 Mich. 481, 106 
N. W. 1122, 8 Am. & Eng. Ann. Cas. 
170; Knaus v. Jenkins, 40 N. J. L. 
288, 29 Am. Rep. 237; Smith v. 
Compton, 20 Barb. (N. Y.) 262; Cole 
Mfg. Co. V. Collier, 91 Tenn. 525, 19 
S. W. 672, 30 Am. St. 898. See also, 
Laurence v. White, 131 Ga. 840, 63 
S. E. 631, 19 L. R. A. (N. S.) 966, 
IS Am. & Eng. Ann. Cas. 1097; Kin- 
ney V. Baltimore & O. Employe's Re- 
lief Assn., 35 W. Va. 385, 14 S. E. 
8, 15 L. R. A. 142 and note. See cases 
cited in note 24, § 2948. 



§ 2942 ARBITRATION AND AWARD. 



140 



nor does a submission suspend the running of the statute of 
limitations against the cause of action during the submission.^' 

§ 2942, Manner and form of submission. — In general, it is 
not necessary that a submission at common law be in writing, or 
be in any particular form, if it express the parties' intention to 
arbitrate the matters included, and to abide by the award." In 
almost all jurisdictions in the United States there are statutes 
providing for arbitrations, and prescribing the manner of sub- 
mission, and authorizing the court to enter a judgment on the 
award. Such statutes are in derogation of the common law, and 
the submission under them must conform to the statutory re- 
quirements.^" At common law parol submissions are valid, "^ and 
it is held that submissions in writing may be altered by parol.^^ 
But where a writing would be necessary to a binding contract 
between the parties as to the subject of dispute, for instance, in 
case of an interest in real estate which can only be conveyed in 
writing, an oral submission is void, and a written submission is 

"In re Astley, 80 L. T. 116, 68 L. (Cal.), 124 Pac. 712, and Dore v. 

J. Q. B, 2S2; Hales v. Stevenson, 9 Southern Pac. Co. (Cal.), 124 Pac. 

Jur. (N. S.) 300; Curtis v. Sacra- 817; Crane v. Barry, 47 Ga. 476; 

mento, 70 Cal. 412, 11 Pac. 748; Moody v. Nelson, 60 111. 229; Francis 

Hornblower v. George Washington v. Ames, 14 Ind. 251; Franklin Min. 

Univ., 31 App. Cas. (D. C.) 64, 14 Co. v. Pratt, 101 Mass. 359: Nay v. 

Am. & Eng. Ann. Cas. 696; Cowart Boston & W. St. R. Co., 192 Mass. 

V. Perrine, 18 N. J. Eq. 454, 21 N. J. 517, 78 N. E. 547; Galloway v. Gib- 

Eq. 101. Contra. Colkings v. Thacks- son, 51 Mich. 135, 16 N. W. 310. See 

ton, 1 N. Car. 312, Com. & N. Conf. cases cited under note 27, § 2942. 

93. Unless one party uses agreement ^* Lilley v. Tuttle (Colo.), 117 Pac. 

to submit as a means of inducing 896. See Elliott Ev., § 1654; Koon v. 

other party to refrain from bring- Hollingsworth, 97 111. 52 ; Dilks v. 

ing suit until it is barred by the Hammond, 86 Ind. 563 ; Conger v. 

statute. Hornblower </. George Wash- Dean, 3 Iowa 463, 66 Am. Dec. 93 ; 

ington Univ., 31 App. Cas. (D. C.) Philbrick v. Preble, 18 Maine 255, 36 

64, 14 Am. & Eng. Ann. Cas. 696. Am. Dec. 718; Peabodv v. Rice, 113 

'"See Elliott Ev., § 1654; Duke Jilass. 31; Cady v. Walker, 62 Mich. 
Buccleuch v. Metropolitan Board of 157, 28 N. W. 805, 4 Am. St. 834; 
Works, L. R. 5 Exch. 221 ; Greer v. Hewitt v. Lehigh &c. R. Co., 57 N. J. 
Canfield, 38 Nebr. 169; Brady v. Eq. 511, 42 Atl. 325; Winne v. Elder- 
Brooklyn, 1 Barb. (N. Y.) 584; V/il- kin, 2 Pin. (Wis.) 248, 1 Chand. 
son V. Getty, 57 Pa. St. 266; New- (Wis.) 219, 52 Am. Dec. 159. 
comb V. Wood, 97 U. S. 581, 24 L. ''Russell Awards, pt. 1, ch. Ill, sec. 
ed. 1085. 2. p. 46; Graham v. Graham, 9 Pa. St. 

'» See Meloy v. Imperial Land Co. 254, 49 Am. Dec. 557. 



141 



ARBITRATION. 



§ ' 2942 



necessary/' but the submission need not be under seal.^* A sub- 
mission may be entered into by indenture, with mutual covenants 
to abide the award." It is held that when a dispute arises about 
a sealed instrument, the submission must be under seal.^" If re- 
quired by the statute to be in writing, a statutory submission must 
conform to- such requirement.^' There may be a submission by 
mutual bonds, conditioned to become void upon performance of 
the award.^* A written submission supersedes and merges a pre- 
ceding or simultaneous oral submission.^" Statutes in certain 
states make arbitration compulsoiy on one party to a dispute, at 
the other's election.'"' In some cases the courts will uphold de- 
fective statutory submissions in order to carry out the intention 
of the parties."^ A submission to arbitration may be made a rule 
of court where the statute gives authority, if the submission con- 
tains a stipulation to that effect,^^ though it may be made a rule 



"^ See note, 102 Am. St. 247 ; Wal- 
den V. McKinnon, 157 Ala. 291, 47 
So. 874, 23 L. R. A. (N. S.) 716 and 
note; Brown v. Mize, 119 Ala. 10, 
24 So. 453 ; Walden v. McKinnon, 157 
Ala. 291. 47 So. 874, 22 L. R. A. (N. 
S.) 716; Logsdon v. Roberts, 3 T. b. 
Mon. (Ky.) 255; Copeland v. Wad- 
ing River Reservoir Co., 105 Mass. 
397 ; McMulIen v. Mayo, 8 Sm. & M. 
(Miss.) 298; Valentine v. Valentine, 

2 Barb. Ch. (N. Y.) 430; Davy's 
Exrs. V. Faw, 7 Cranch (U. S.) 171, 

3 L. ed. 305 ; District of Columbia v. 
Bailey, 171 U. S. 161, 43 L. ed. 118, 
18 Sup. Ct. 868. 

"Russell Awards (7th ed.), S3. 

= Russell Awards (7th ed.), 53; 
Spooner v. Payne, 16 L. J. C. P. 225. 

■"Logsdon V. Roberts' Jixrs., 3 T. 
B. Mon. (Ky.) 255; French v. New, 
28 N. Y. 147, 2 Abb. Dec. (N. Y.) 
209.- 

" Dudley v. Farris, 79 Ala. 187; 
Jones V. Payne, 41 Ga. 23; Boots v. 
Canine, 94 Ind. 408; Williams v. 
Perkins, 83 Mo. 379; Pierce v. Kirby, 
21 Wis. 124. 

=^ Russell Awards (7th ed.), 54, 55; 
Cooth V. Jackson, 6 Ves. Jr. 12; 
Winter v. White, 1 Brod. & B. 350, 
5 E. C. L. 677; Hayes v. Hayes, Cro, 
Car. 433; Washburne v. Lufkin, 4 
Minn. 466; Marshall v. Reed, 48 N. 
H. 36; Ex parte Wallis, 7 Cow. (N. 



Y.) 522; Pass v. Critcher, 112 N. 
Car. 405, 17 N. E. 9. 

""Freeman v. Beadle, 2 Root 
(Conn.) 492; Symonds v. Mayo, 10 
Cush. (Mass.) 39; Loring v. Alden, 
3 Mete. (}\lass.) 576. See cases cited 
in note 33, § 2949. 

"Barnes v. West, 16 Hun (N. Y.) 
68. Such a statute was held un- 
constitutional in People v. Haws, IS 
Abb. Pr. (N. Y.) 115, 24 How. Pr. 
(N. Y.) 148, 37 Barb. (N. Y.) 440. 
See also, Cutler v. Richley, 151 Pa. 
St. 105, 25 Atl. 96, 30 Wkly. Note Cas. 
561 ; Pittsburgh, C. & St. L. R. Co., v. 
Garrett, 50 Ohio St. 405, 34 N. E. 
493 ; Erie v. Tracy, 2 Grant Cas. 
(Pa.) 20. 

=^ White V. Fox, 29 Conn. 570; 
Wood V. Holden, 45 Maine 374; 
Wright V. Raddin, 100 Mass. 319; 
Callaman v. Port Huron &c. R. Co., 
61 Mich. 15, 27 N. W. 718; Wynn 
v. Bellas, 34 Pa. St. 160; Hill v. Tay- 
lor, 15 Wis. 190. See also, Clement v. 
Comstock, 2 Mich. 359; Mc Adams' 
Exrs. V. Stilwell, 13 Pa. St. 90. 

''Ryan v. Dougherty, 30 Cal. 218; 
Fargo V. Reighard, 13 Ind. App. 39, 
39 N. E. 888, 41 N. E. 74; Carson v. 
Carson, 1 Met. (Ky.) 434; Fox v. 
Ealer, 2 Miles (Pa.) 169. See Zehner 
v. Lehigh Coal &c. Co., 187 Pa. 487, 
41 Atl. 464, 67 Am. St. 586. 



§ 2943 ARBITRATION AND AWARD. I42 

of court after the making of the award under certain circum- 
stances.^^ Until it is made a rule of court, the court has no 
jurisdiction over an award. ^* 

§ 2943. What may be submitted. — Unless statute or pub- 
lic policy forbids, all controversies of a civil nature may be the 
subject of arbitration.^" This includes matters of law or equity 
jurisdictions, and claims respecting real or personal property. It 
has been held that it is not even necessary that there should have 
been a previous controversy,^" and that the amicable settlement 
of a doubtful question by arbitration is proper.^' All matters of 
difference between the parties need not be submitted, for it is 
proper to submit only one of many, as, for instance, even one 
item of a disputed account.^* That an action between the parties 
should be pending is unnecessary. **' Nor is it necessary that the 
claim should be one legally enforcible, if there is actually a contro- 
versy as to the rights of the parties.*" If an action is pending, the 
parties are not prevented from submitting it to arbitration.*^ 

It was formerly held that arbitrators may not be given the 
power to transfer the title to real estate.*^ But there seem 
to have been no restrictions as to arbitrating disputes relating 

^ California Academy of Sciences " See, however, Toledo Steamship 

V, Fletcher, 99 Cal. 207, 33 Pac. 855 ; Co. v. Zenith Transp. Co., 184 Fed. 

Hazen v. Addis, 14 N. J. L. 333 ; Ex 391, 106 C. C. A. 501. 

parte Vasques, 5 Cow. (N. Y.) 29; =' Pearce v. Mclntyre, 29 Mo. 423; 

Richards v. Smith, 33 Utah 8, 91 Pac. McBride v. Hagan, 1 Wend. (N. Y.) 

683. 326; Dockery v. Randolph (Tex.), 

■"Dudley v. Farris, 79 Ala. 187; 30 S. W. 270. 

Pierratt v. Kennedy, 43 Cal. 393; ™ Titus v. Scantling, 4 Blackf. 

Steel V. Steel, 1 Nev. 27; Moore v. (Ind.) 89; Berkshire Woollen Co. v. 

Austin, 85 N. Car. 179. Day, 12 Cush. (Mass.) 128. 

^Hewitt V. Hewitt, 1 Q. B. 110, 4 ^"Dilks v.- Hammond, 86 Ind. 563; 

P. & D, 598, 41 E. C. L. 460, 3 Cyc. Downing v. Lee, 98 Mo. App. 604, 

590; Tennessee Coal &c. Co. v. Rous- 73 S. W. 721: Parrish v. Strickland, 

sell, 155 Ala. 435, 46 So. 866, 130 Am. 52 N. Car. 504; Mayo v. Gardner, 49 

St. 56; Marion V. Ganby, 68 Iowa 142, N. Car. 359; Houston Saengerbund 

26 N. W. 40; Stanwood v. Mitchell, v. Dunn, 41 Tex. Civ. App. 376, 

59 Maine 121 ; Cox v. Jagger, 2 Cow. 92 S, W. 429. 

(N, Y.) 638, 14 Am. Dec. 522. "Dulin v. Caldwell, 29 Ga. 362; 

"" Brown v. Wheeler, 17 Conn. 345, Fink v. Fink, 8 Iowa 313 ; Higgins v. 

44 Am. Dec. 550. See Cothran v. Kinneady, 20 Iowa 474. 

Knox, 13 S. Car. 496. Contra, see *= Shelton v. Alcox, 11 Conn. 240; 

Pepin V. Societe Jean Baptiste, 23 Whitney v. Holmes, 15 Mass. 152; 

R. I. 81, 49 Atl. 387, 91 Am. St. 620 Speer v. McChesney, 2 Watts & S. 

(holding void an agreement to sub- (Pa.) 233; Davis v. Havard, IS Serg. 

mit to arbitration a controversy not & R. (Pa.) 165, 16 Am. Dec. 537; 

yet arisen). Akely v. Akely, 16 Vt. 450. 



143 ARBITRATION. § 2943 

to the right of property in personalty/* Later the submis- 
sion of controversies regarding real estate was permitted by 
means of mutual bonds conditioned to perform the award," 
and finally the rule became established that equity would 
either specifically enforce an agreement to abide an award 
of the right of property in real estate/^ or consider the 
party to the award equitably estopped from denying its force, 
and this rule of estoppel is now a rule of the common law/' 
Many statutes relating to arbitration prohibit, expressly or by 
necessary implication, the submission under them of controver- 
sies concerning the fee of real estate,*^ but the existence of such 
a statute does not by implication prevent the submission of such 
questions to a common-law arbitration,** and, it is held, a statute 
which forbids the submission under it of disputes concerning "any 
estate in fee or for life for real estate", allows the submission of 
disputes pertaining to equitable estates.*' There are many mat- 
ters connected with or relating to real estate, but not involving 
the right of property therein, which may without restriction be 
submitted to arbitration, such as the location of disputed boun- 
dary lines, where titles do not conflict.^" claims for damages for 

'''Shelton v. Alcox, 11 Conn. 240; "Spencer v. Winselraan, 42 Cal. 

Miller v. Brumbaugh, 7 Kans. 343. 479; Snodgrass v. Smith, 13 Ind. 393; 

" Den V. Allen, 2 N. J. L. 32, 3 Philbrick v. Preble, 18 Maine 255, 36 

Bl. Comm. 16; Marks v. Marriot, 1 Am. Dec. 718; Fowler v. Bigelow, 8 

Ld Raym. 114. Mass. 1; Lang v. Salliotte, 79 Mich. 

*°Crabtree v. Green, 8 Ga. 8; 505, 44 N. W. 938, 7 L. R. A. 720; 

Goodridge v. Dustin, 5 Mete. (Mass.) Wiles v. Peck, 26 N. Y. 42; Thyger- 

363 ; Davis v. Havard, 15 Serg. & R. son v. Whitbeck, 5 Utah 406, 16 Pac. 

(Pa.) 165, 16 Am. Dec. 537; Gar- 403; Russell v. Clark, 60 Wis. 284, 

vin V. Garvin, 55 S. Car. 360, 33 S. E. 18 N. W. 844. 

458; Shelton v. Alcox, 11 Conn. 240; '* Shackelford v. Purket, 2 A. K. 

Shackleford v. Purket, 2 A. K. Marsh. (Ky.) 435, 12 Am. Dec. 422; 

Marsh. (Ky.) 435, 12 Am. Dec. 422; McNear v. Bailey, 18 Maine 251; 

Jones V. -Boston Mill. Corp., 4 Pick. Door v. Hill, 62 N. H. 506; Myers v. 

(Mass.) 507, 16 Am. Dec. 358; Page Easterwood, 60 Tex. 107; Miller v. 

V. Foster, 7 N. H. 392; Cox v. Jag- Miller, 99 Va. 125, il S. E. 792. 

ger, 2 Cow. (N. Y.) 638, 14 Am. "Olcott v. Wood, 14 N. Y. 32, 

Dec 358 affg. 15 Barb. (N. Y.) 644; McCord 

"Moore v. Helms, 74 Ala. 368; v. Flynn, 111 Wis. 78, 86 N. W. 668, 

Shackelford v. Purket, 2 A. K. Marsh ""Sweeny v. Miller, 34 Maine 388; 

(Ky.) 435 12 Am. Dec. 422; Weeks Thayer v. Bacon, 3 Allen (Mass.) 

V. Trask, 81 Maine 127, 16 Atl. 413, 2 163, 80 Am. Dec. 59; Lang v. Sal- 

L. R. A. 532; Sellick v. Addams, 15 liotte, 79 Mich. 505, 44 N. W. 938, 7 

Johns. (N. Y.) 197; Darby's Lessee v. L. R. A. 720; Jones v. Dewey, 17 N. 

Russel, 5 Hayw. (Tenn.) 138, 9 Am. H. 596; Wood v. Lafayette, 46 N. Y. 

Dec. 767. See cases cited in note 66, 484; Gaylord v. Gaylord, 48 N. Car. 

§ 2944. 367; Evars v. Kamphaus, 59 Pa. St. 



§ 2943 



ARBITRATION AND AWARD. 



144 



injuries to land," damages for a breach of warranty as to free- 
dom from encumbrance/^ the amount of compensation for land 
taken under eminent domain," the amount of purchase price to 
be paid,^* questions of partition between cotenants," claims for 
dower," or claims for a trust fund invested in realty." 

Claims en forcible only at equity may be submitted under a com- 
mon-law arbitration." An award which is based on a claim arising 
out of an illegal transaction will not be enforced,'" yet a court has 
refused to open a general award because an illegal item was con- 
tained in it.*^" Criminal offenses against the public may not be 
submitted to arbitration,"^ but one who has a civil action for dam- 
ages may arbitrate the amount thereof, even though an indictment 
would lie for the act which caused the damage."^ Questions of 
law may be referred to arbitrators, as the construction of a stat- 
ute,*^ the sufficiency of a pleading,"^ or the construction of a 
will."' 



379; Thygerson v. Whitbeck, S Utah 
406, 16 Pac. 403; Stewart v. Cass, 
16 Vt. 663, 42 Am. Dec. 534. 

"Parmelee v. Allen, 32 Conn. 115; 
Carson v. Earlywine, 14 Ind. 256 ; 
Snow V. Moses, 53 Maine 546; Fitch 
V. Constantine Hydraulic Co., 44 
Mich. 74, 6 N. W. 91. 

"'Snodgrass v. Smith, 13 Ind. 393. 

='-Knoche v. Chicago, M. & St. P. 
R. Co., 34 Fed. 471; Hewitt v. Le- 
high &c. R. Co., 57 N. J. Eq. 511, 42 
Atl. 325. 

"White V. Fox, 29 Conn. 570; 
Weston V. Stuart, 11 Maine 326; 
Daw's Exrs. v. Faw, 7 Cranch (U. 
S.) 171, 3 L. ed. 305. 

"'Knight V. Burton, 6 Mod. 231; 
Johnson v. Wilson, Willes 248; Cas- 
stevens v. Casstevens, 227 111. 547, 81 
N. E. 709, 118 Am. St. 291. 

™Cox V, Jagger, 2 Cowen (N. Y.) 
638, 14 Am. Dec. 522. 

" French v. Richardson, S Cush. 
(Mass.) 450. 

"'Caton V. MacTavish, 10 Gill & J. 
(Md.) 192; Olcott v. Wood, 14 N. 
Y. 32. 

'™ See note 31, § 2942. Singleton v. 
Benton, 114 Ga. 548, 40 S. E. 811, 58 
L. R. A. 181 n. See note 58 L. R. A. 
181-3, upon the effect of award upon 
claim arising out of illegal transac- 
tions. Levy V. Ross, T. U. P. Charlt. 



(Ga.) 292; Singleton v. Benton, 114 
Ga. 548, 40 S. E. 811, 58 L. R. A. 
ISln; Harrington v. Brown, 9 Allen 
(Mass.) 579; Hall v. Kimmer, 61 
Mich. 269, 28 N. W. 96, 1 Am. St. 
575 ; Lum v. Fauntleroy, 80 Miss. 757, 
32 So. 290, 92 Am. St. 620; Hale v. 
Sharp, 4 Coldw. (Tenn.) 275. See 
also, Hall v. Kimmer, 61 Mich. 269, 
28 X. W. 96, 1 Am. St. 575. 

" Wohlenberg v. Lageman, 6 
Taunt. 251, 1 E. C. L. 600. 

"'Reg. V. Hardey, 14 Q. B. 529, 14 
Jur. 649, 19 L. J. Q. B. 196, 68 E. 
C. L. 529; Hungerford Tp. v. Lat- 
timer, 13 Ont. App. 315 ; Partridge v. 
Hood, 120 Mass. 403, 21 Am. Rep. 
524; Buckwalter v. United States, 
11 Serg. & R. (Pa.) 193. 

"'Noble V. Peebles, 13 Serg. & R. 
(Pa.) 319. See also, Reg. v. Hardev, 
14 Q. B. 529, 14 Jur. 649, 19 L. J. Q. B. 
196, 68 E. C. L. 529 ; Baker v. Town- 
shend, 7 Taunt. 422, 2 E. C. L. 428, 
1 Moo. C. P. 120. 

■"Price V. Hollis, 1 M. &. S, 105. 

"•Mathew v. Davis, 1 Dowl. (N. 
S.) 679. 

"Steff V. Andrews, 1 Madd. (1st 
Am. ed.) 349. But arbitrators cannot 
decide a question of law if not clearly 
within scope of submission. King 
Iron Bridge &c. Co. v. St. Louis, 43 
Fed. 768, 10 L. R. A. 826. 



1 45 ARBITRATION. § 2944 

§ 2944. Who may submit to arbitration. — The general 
rule is that the power to submit to arbitration is coextensive with 
the power to contract creating liability,"" and generally speaking, 
one who has no power to release or transfer the subject-matter 
of arbitration may submit a question concerning its release or 
transfer." Where persons not parties to a suit, but interested in 
its subject-matter, agree to submit the matter to arbitration, they 
are bound by the award."* If one acting in more than one ca- 
pacity agrees to submit, it will be determined from the terms of 
the submission whether he submitted in his individual or repre- 
sentative capacity, he having the right to do either or both."" 

As an infant cannot bind himself by contract, so he cannot 
render an award absolutely binding by entering into a submis- 
sion."* An attempt to submit an infant's cause of action by par- 
ties acting in his behalf is held absolutely void.'^ The general 
rule is that an adult cannot escape liability on an award in favor 
of an infant upon the ground that the latter was not bound by 
the submission," but the contrary is held in some cases.'''* An 
infant may ratify the submission after reaching his majority, and 
thus become bound by the award.'* 

At common law a married woman could not enter into a sub- 

■» Elliott Ev. 1667; Dist. of Colum- "Elliott Ev., § 1667; Jones v. 

bia V. Bailey, 171 U. S. 161, 43 L. ed. Payne, 41 Ga. 23; Baker v. Lovett, 

118, 18 Sup. Ct. 868. See also, Brown 6 Mass. 78, 4 Am. Dec. 88; Millsaps 

V. Mize, 119 Ala. 10, 24 So. 453; v. Estes, 134 N. Car. 486, 46 S. E. 

Wilkes V. Cotter, 28 Ark. 519; Webb 988, 137 N. Car. 535, SO S. E. 227, 70 

V. Zeller, 70 Ind. 408; Bean v. Far- L. R. A. 170 and note, 107 Am. St. 

nam, 6 Pick. (Mass.) 269; Handy v. 496. In England, the courts may au- 

Cobb, 44 Miss. 699; Brady v. Brook- thorize a submission of a pending 

lyn 1 Barb. (N. Y.) 584; McCune v. suit which will bind an infant. Dowse 

Lytle, 197 Pa. St. 404, 47 Atl. 190. v. Cox, 3 Bing. 20, 11 E. C. L. 20; 

"'Brown v. Mize, 119 Ala. 10, 24 So. Proudfoot v. Boyle, 15 M. & W. 198; 

453 • Stahl V. Brown, 72 Iowa 720, 32 Allan v. O'Neill, 2 Ch. Chamb. (Ont.) 

N. W. 105 ; Wyatt v. Benson, 23 Barb. 22. 

(N Y) 327- Dist. of Columbia v. "Millsaps v. Estes, 137. N. Car. 

Bailey, 171 U. S. 161, 43 L. ed. 118, 535, SO S. E. 227, 70 L. R. A. 171 

18 Sup. Ct. 868. and note, 107 Am. St. 496. 

"'Gunton v. Nurse, 5 Moore C. P. '^Godfrey v. Wade, 6 Moo. C. P. 

259 2 Br & B 447 ; Shultz v. Lem- 488, 17 E. C. L. 490 ; Palmer v. Davis, 

pert 55 Tex 273. 28 N. Y. 242; Chambers v. Ker, 6 

™king V. Jemison, 33 Ala. 499; Tex. Civ. App. Z7Z. 24 S. W. 1118. 

Bennett v. Pierce, 28 Conn. 315; "Britton v. Williams' Devisees, 6 

Munn V. Reed, 4 Allen (Mass.) 431; Munf. (Va.) 453. 

Tallman v. Tallman, 5 Cush. (Mass.) "Stone v. Knight, Noy 93. 
525; Macon v. Crump, 1 Call (Va.) 
575. 

10— Contracts, Vol. 4 



§ 2944 Arbitration and award. 146 

mission that would bind her to abide by the award." Yet if she 
joined in a submission, the other party must abide by an 
award in Iier favor.'" She might join with her husband 
in a submission affecting her property, and the husband be 
bound, but no personal liability created against her." She 
may, it is held, submit to arbitration disputes concerning 
property over which she has the same control as a feme 
sole," and as to such property, even where arbitration statutes 
except married women from their provisions, she may make a 
valid common-law submission.'^'' The husband may not submit 
matters concerning the wife's separate estate and bind her,*" nor 
any matters involving her interest in realty which he cannot 
transfer or release,*^ but he may submit matters concerning such 
property of hers as, by virtue of the marriage relation, he has 
power absolutely to transfer or release.^" A submission regard- 
ing their joint property by one cotenant will not bind the other,*^ 
unless he joins.''* One joint creditor may submit and the arbi- 
tration will bind him,*'* but he cannot bind his cocreditor as to the 
joint claim.*" Neither may one joint debtor submit and bind the 
other debtor ; yet it has been held that if he pays the award, he 
may compel the other debtor to reimburse him for what was 
justly paid to his use.*' Trustees may submit matters concern- 
ing the trust estate,** but the cestui que trust cannot bind the 

"Elliott Ev., § 1667; Fort v. Bat- ™Cobb v. Parham, 4 La. Ann. 148; 

tie, 13 Smed..M, (Miss.) 133; Handy Fort v. Battle, 13 Sm. & M. (Miss.) 

V. Cobb, 44 Miss. 699 ; Rumsey v. Leek, 133 ; Fortune v. Killebrew, 86 Tex. 

S Wend. (N. Y.) 20; Smith v. Bru- 172, 23 S. W. 976. 

ton, 137 N. Car. 79, 49 S. E. 64; "Miller v. Moore, 7 S. & R. (Pa.) 

Crouch V. Crouch, 30 Tex. Civ. App. 164. 

288, 70 S. W. 595. ^Lumlev v. Hutton, 1 Rolle 268; 

™In re Warner, 2 Dowl. & L. 148; Smith v. Ward, Stvle 351; Fort v. 

Great Western R. Co. v. Baby, 12 U. Battle, 13 Sm. & IM. (Miss.) 133. 

C. Q. B. 106. >« .Mobile v. Wood, 95 Fed. 537; 

"Emery v. Wase, 5 Ves, Jr. 846; Eastman v. Burleigh, 2 X. H. 484. 

Bagley v. Humphries, 11 Grant Ch. "Smith v. Smith, 4 Rand. (Va.) 

(U. C.) 118; Taylor v. Smith, 93 95; Boyd's Heirs v. Magruder's 

Mich. 160, 52 N. W. 1118; Fort v. Heirs, 2 Rob. (Va.) 761. 

Battle, 13 Sm. & M. (Miss.) 133. '"Runyon v. Rutherford, 55 W. 

"Hoste V. Dalton, 137 Mich. 522, Va. 436, 47 S. E. 150. 

100 N. W. 750; Smith v. Sweeny, 35 ""Onion v. Robinson, 15 Vt. 510. 

N. Y. 291 ; Montgomery v. American " Burnell v. Minot, 4 Moo. C. P. 

Cent. Ins. Co., 108 Wis. 146, 84 N. W. 340, 16 E. C. L. 375. 

175. "Davies v. Ridge, 3 Esp. 101; 

™Hoste V. Dalton, 137 Mich. 522, Clarke v. Cordis, 4 Allen (Mass.) 

100 N. W. 750. 466; Brower v. Osterhout, 7 Watts & 



147 ARBITRATION. § 2944 

trustee by submission/" In general, a guardian's submission on be- 
iialf of his ward, binds both him and the ward,^'' and this rule has 
been applied in case of the guardian of a non compos mentis."^ But 
the guardian may not submit for his ward, where he has submitted 
an individual interest adverse to that of his ward.^^ A guardian 
ad litem or next friend can only conduct a suit in court, and 
cannot bind his ward by a submission of the controversy to arbi- 
tration."^ An executor may submit controversies to which he in 
his representative capacity is a party, "^ but not those to which he is 
a party in both individual and representative capacities,"^ nor may 
he submit matters concerning realty over which he has no con- 
trol."" In a few jurisdictions statute prevents an executor or 
administrator from binding the estate by submission tq arbitra- 
tion."' At common law, if an executor or administratof in an 
arbitration recovered less than he would have been entitled to 

S. (Pa.) 344. But see Crum v. 171 U. S. 161, 43 L. ed. 118, 18 Sup. 

Moore's Admr., 14 N. J. Eq. 436, 82 Ct. 868. And see Jones v. Blalock, 

Am. Dec. 262. 31 Ala. 180 ; Bennett v. Pierce, 28 

^'McDonell v. Boulton, 17 U. C. Conn. 315; Lank v. Kinder, 4 Har. 

Q. B. 14. (Del.) 457; Lively v. Hunter, 130 

'"Strong V. Beroujon, 18 Ala. 168; Ga. 106, 60 S. E. 264; In re Vida, 1 

Beebe v. Trafford, Kirby (Conn.) Hawaii 63; Overly's Exr. v. Overly's 

215; Kelley v. Adams, 120 Ind. 340; Devisees, 1 Mete. (Ky.) 117; Ken- 

22 N. E. 317; Irvine's Heirs v. Crock- dall v. Bates, 35 Maine 357; Dickey 
ett, 4 Bibb (Ky.) 437; Weston v. v. Sleeper, 13 Mass. 244; Bailey v. 
Stuart, 11 Maine 626; Bean v. Far- Dilworth, 10 Sm. & M. (Miss.) 404, 
num, 6 Pick. (Mass.) 269; Goleman 48 Am. Dec. 760; Crum v. Moore's 
V. Turner, 14 Sm. & M. (Miss.) Admr., 14 N. J. Eq. 436, 82 Am. 
118; Weed v. Ellis, 3 Caines (N. Y.) Dec. 262; Wood v. Tunnicliff, 74 N. 
253; Hume v. Hume, 3 Pa. St. 144. Y. 38; Childs v. Updike, 9 Ohio St. 
See Bunnell v. Bunnell, 111 Ky. 566, 333; Christy v. Christy, 176 Pa. St. 

23 Ky. L. 800, 64 S. W. 420, 65 S. W. 421, 35 Atl. 245 ; Parker v. Provi- 
607. See note, 89 Am. St. 291. dence &c. Steamship Co., 17 R. I. ild, 

"^Hutchins v. Johnson, 12 Conn. 22 Atl. 284, 23 Atl. 102, 14 L. R. A. 

376 30 Am. Dec. 622. 414, 33 Am. St. 869; Unterrainer v. 

'^'Poullain V. Poullain, 79 Ga. 11, Seelig, 13 S. Dak. 148, 82 N. W. 394; 

4 S. E. 81; De Vaughn v. McLeroy, Powers v. Douglass, 53 Vt. 471, 38 

82 Ga 687, 10 S. E. 211; Fortune v. Am. Rep. 699; Nelson v. Conwell, 11 

Killebrew, 86 Tex. 172, 23 S. W. Grat. (Va.) 724 ; Wamsley v. Wams- 

976 ley, 26 W. Va. 45 ; Wood v. Treleven, 

■^Bunnell v. Bunnell, 111 Ky. 566, 74 Wis. 577, 43 N. W. 488. 

64 S W 420, 65 S. W. 607; Fort v. °°Koella v. McKenzie, 15 Grant 

Battle, 13 Sm. & M. (Miss.) 133; Ch. (U. C.) 331; Boynton v. Boyn- 

Millsaps V. Estes, 134 N. Car. 486, ton's Estate, Itt Vt. 107. 

46 S E. 988, 137 N. Car. 535, SO "Bridgham v. Prince, 33 Mame 

S. E. 227, 70 L. R. A. 170, 107 Am. 174. 

St. 496 ■ Hannum's Heirs v. Wallace, " Reitzell v. Miller, 25 111. 67 ; Clark 

9 Humph. (Tenn.) 129. See note 97 v. Hogle, 52 111. 427; Yarborough v. 

Am St 1001. Leggett, 14 Tex. 677; Callaghan v. 

^'District of Columbia v. Bailey, Grenet, 66 Tex. 236, 18 S. W. 507. 



2944 



ARBITRATION AND AWARD. 



148 



by action, or if there was an excessive recovery against him, he 
might be liable to those interested in the estate."' It may be that 
if the estate has not sufficient assets, the administrator or execu- 
tor will become personally bound."^ After an adjudication in 
bankruptcy, a bankrupt cannot bind the estate by submission to 
arbitration,^ but a valid award made before adjudication in bank- 
ruptcy is valid against his assignee,^ though a subsequent award 
is not.'' The power to submit matters respecting the estate to 
arbitration is generally conferred on the assignee in bankruptcy 
by local statute. A state may submit to arbitration,* so may pri- 
vate° and municipal or quasi-municipal corporations," also sole' 
and eleemosynary corporations.^ Whether a public officer may 
submit depends on his statutory powers.' Any duly authorized 
agent may submit and bind his principal,^" but it has been held 



"'Overly v. Overly, 1 Mete. (Ky.) 
117; Bean v. Farnam, 6 Pick. (Mass.) 
269; Crura v. Moore, 14 N. J. Eq. 
436, 82 Am. Dec. 262; Swicard v. 
Willson, 2 Mill. Const. (S. Car.) 218; 
Yarborough v. Leggett, 14 Tex. 677. 

" Riddell V. Sutton, S Bing. 200, IS 
E. C. L. 541 ; In re Joseph, 1 Russ & 
M. 496; Tallman v. Tallman, 5 Cush. 
(Mass.) 325; Wood v. Tunnicliff, 74 
N. Y. 38; Konigmacher v. Kimmell, 
1 P. & W. (Pa.) 207, 21 Am. Dec. 
374. 

^In re Milnes, 15 C. B. 451, 80 E. 
C. L. 451, 24 L. J. C. P. 29; In re 
Ford, 18 Nat. Bankr. Reg. 426, Fed. 
Cas. No. 4932. 

^Whitacre v. Pawlin, 2 Vern. 229. 

'Marsh v. Wood, 9 Barn. & Cr. 
659, 17 E. C. L. 296; Dod v. Her- 
ring, 3 Sim. 143, 1 Russ. & M. 153; 
Ex parte Kemshead, 1 Rose 149. 

* State V. Ward, 9 Heisk. (Tenn.) 
100. 

'White Star Min. Co. v. Hultberg, 
220 111. 578, n N. E. 327; Madison 
Ins. Co. V. Griffin, 3 Ind. 277; Frye- 
burg Canal Co. v. Frye, 5 Greenl. 
(Maine) 38; Morville v. American 
Tract. Soc, 123 ^lass. 129, 25 Am. 
Rep. 40 ; Wood v. Auburn &c. R. Co., 
8 N. Y. m Seld. Notes (N. Y.) 
79 ; Alexandria Canal Co. v. Swann, 
S How. (U. S.) 83, 12 L. ed. 60. 

° Shawneetown v. Baker, 85 111. 563 ; 
District Tp. v. Rankin, 70 Iowa 65, 29 
N. W. 806; Boston v. Brazer, 11 



Mass. 447; Brady v. Brooklyn, 1 
Barb. (N. Y.) 584; Springfield v. 
Walker, 42 Ohio St. 543; Smith v. 
Wilkinsburg, 172 Pa. St. 121, 33 Atl. 
371 ; Remington v. Harrison Coun- 
ty Court, 12 Bush (Ky.) 148; Chap- 
line v. Overseers of Poor, 7 Leigh 
(Va.) 231, 30 Am. Dec. 504; Kane v. 
Fond du Lac, 40 Wis. 495. See Mc- 
Kennie v. Charlottesville & A. R. Co., 
no Va. 70, 65 S. E. 503, 18 Am. & 
Eng. Ann. Cas. 1027 and note as 
to right of municipality to arbitrate 
a disputed claim. 

'Rolle Abr. Arb. 268 (A) 3. 

^ Attorney-General v. Clements, T. 
& R. 58; Attornev-General v. 
Hewitt, 9 Ves. Jr. 232; Attorney- 
General V. Fea, 4 Madd. 274. See 
Wvatt V. Benson, 4 Abb. Pr. (X. 
Y.) 182, 23 Barb. (N. Y.) 327. 

"Comrs. of Public Works v. Daly. 
6 U. C. Q. B. (Can.) ZZ; Hine v. 
Stephens, 33 Conn. 497, 89 Am. Dec. 
217; Mann v. Richardson, 66 III. 481; 
M}'ers V. Gibson, 147 Ind. 452, 46 N. 
E. 914; People v. Oneida County, 24 
Hun (N. Y.) 413; Dix v. Dumner- 
ston, 19 Vt. 262; United States v. 
Ames, 1 Woodb. & M. (U. S.) 76, 
Fed. Cas. No. 14441. 

^"McDonald v. Bond, 195 111. 122, 
62 N. E. 881 ; Eastman v. Burleigh, 2 
N. H. 484; Gibbs v. Holcomb, 1 
Wis. 23. See also, Buckland v. Con- 
way, 16 Mass. 396; Memphis & C. R. 
Co. V. Scruggs, 50 Miss. 284; Wood 



149 



ARBITRATION. 



2944 



that his authority must be express/^ and that a mere general 
agent has not such authority/" nor one with power to collect and 
sue/^ or settle/* or compromise," nor has a factor implied power 
to submit controversies concerning sales or purchases made for 
his principal." The principal may by ratification make a sub- 
mission by an agent binding on himself ^^ and on the other party," 
and an appearance and taking part in arbitration proceedings is 
a sufficient ratification."* Some cases hold that ratification must 
be before award,"" others hold that ratification of the agent's 
submission after award makes the award binding on the prin- 
cipal."^ The general rules of agency apply to the proof of au- 
thority on the part of the agent to make a submission, the man- 
ner of his appointment, the manner of executing his authority, 
and his personal liability. In most jurisdictions one partner may 
not bind the others by submitting partnership matters to arbitra- 
tion,"" for such is no part of the regular business of an ordinary 



V. Auburn &c. R. Co., 8 N. Y. 160; 
Houston Saengerbund v. Dunn, 41 
Tex. Civ. App. 376, 92 S. W. 429. 

"Trout V. Emmons, 29 111. 433, 81 
Am. Dec. 326; Macdonald v. Bond, 
195 111. 128, 62 N. E. 881; King v. 
King, 104 La. 420, 29 So. 205; Mfg. 
&c. F. Ins. Co. V. Mullen, 48 Nebr. 
620, 67 N. W. 445; McPherson v. 
Cox, 86 N. Y. 472. 

"Mobile V. Wood, 95 Fed. 537; 
Trout V. Emmons, 29 111. 433, 81 Am. 
Dec. 326; MacDonald v. Bond, 195 
111. 128, 62 N. E. 881. 

" Scarborough v. Reynolds, 12 Ala. 
252. 

"Huber v. Zimmerman, 21 Ala. 
488, 56 Am. Dec. 255; Allen v. Con- 
federate Pub. Co., 121 Ga. m, 49 
S. E. 782; Trout v. Emmons, 29 111. 
433, 81 Am. Dec. 326; Campbell v. 
Upton, 113 Mass. dl ; McPherson v. 
Cox, 86 N. Y. 472. 

^ Scarborough v. Reynolds, 12 Ala. 
252; Schoff v. Bloomfield, 8 Vt. 472. 

"Ingraham v. Whitmore, 75 111. 
24; Carnochan v. Gould, 1 Bailey 
(S. Car.) 179, 19 Am. Dec. 668. 

"Perry v. Mulligan, 58 Ga. 479; 
Miliken v. Coombs, 1 Greenl. (Maine) 
343, 10 Am. Dec. 70 ; Detroit v. Jack- 
son, 1 Dougl. (Mich.) 106; Memphis 
& C. R. Co. V. Scruggs, 50 Miss. 284; 
Isaacs V. Beth Hamedash Soc, 1 



Hilt. (N. Y.) 469, affd. 19 N. Y. 
584 ; Snow v. Walker, 42 Tex. 154. 

"Terre Haute &c. R. Co. v. Har- 
ris, 126 Ind. 7, 25 N. E. 831, 46 Am. 
& Eng. R. Cas. 582 ; Smith v. Sweeny, 
35 N. Y. 291; Smith v. Morse, 9 
Wall. (U. S.) 76, 19 L. ed. 597. 

"Johnson v. Cochran, 81 Ga. 39, 
6 S. E. 809, 12 Am. St. 294 ; Fryeburg 
Canal Co. v. Frye, 5 Greenl. (Maine) 
38; Blakely v. Graham, 111 Mass. 8; 
Detroit v. Jackson, 1 t)oug. /"Mich.) 
106; Isaacs v. Beth Hamedash Soc, 
1 Hilt. (N. Y.) 469, affd. 19 N. Y. 
584. 

="> Eastman v. Burleigh, 2 N. H. 
484; Tillinghast v. Gilmore, 17 R. 
I. 413, 22 Atl. 942. 

^Hall V. Norwalk Fire Ins. Co., 
57 Conn. 105, 17 Atl. 356; Perry v. 
Mulligan, 58 Ga. 479; Terre Haute 
&c. R. Co. V. Harris, 126 Ind. 7, 25 
N. E. 83, 46 Am. & Eng. R. Cas. 582; 
Cobb V. Parham, 4 La. Ann. 148; 
Furber v. Chamberlain, 29 N. H. 405^ 
Lowenstein v. Mcintosh, 7i] Barb. (N. 
Y.) 251; Smith v. Morse, 9 Wall. (U. 
S.) 76, 19 L. ed. 597. 

=^Karthaus v. Ferrer, 1 Pet. (U. 
S.) 222, 7 L. ed. 121. See also, 
Fancher v. Bibb Furnace Co., 80 
Ala. 481, 2 So. 268; Jones v. Bailey, S 
Cal. 345; Horton v. Wilde, 8 Gray 
(Mass.) 425; Davis v. Berger, 54 



2944 



ARBITRATION AND AWARD. 



ISO 



copartnership, nor can a majority bind the other partners.'" In 
some jurisdictions, however, one partner has imphed power to sub- 
mit on behalf of the partnership.^* One partner may be authorized 
to bind the others,''^ and submission by one partner may be ratified 
by the others,'^ though it has been held not to bind the other 
party if such ratification was made after award." The partner 
who submits partnership matters to arbitration will be bound 
individually, though the other partners repudiate the submission.'^ 
An attorney in civil cases has implied power to submit to arbitra- 
tion his client's case,'" but such submission must be made a rule 
of court and appear of record.^" Where, by the provisions of a 
fire insurance policy, the loss is made payable to the mortgagee 
as his interest may appear, and arbitration upon request of either 
party is provided for, there is a conflict in the cases as to whether 
the mortgagor and insurer by arbitration, without notice to the 
mortgagee, may bind the latter.**^ Where an action is pending, 
all parties to the record must join in the submission in order that 



Mich. 652, 20 N. W. 629; Walker v. 
Bean, 34 Minn. 427, 26 N. W. 232; 
Harrington v. Higham, 13 Barb. (N. 
Y.) 660, IS Barb. (N. Y.) 524; Til- 
linghast v. Gilmore, 17 R. I. 413, 22 
Atl. 942; St. Martin v. Thrasher, 40 
Vt. 460; Wood v. Shepherd, 2 Pat. & 
H. (Va.) 442. And see Stead v. Salt, 
3 Bing. 101, 11 E. C. L. 58; Steig- 
litz V. Egginton, Holt N. P. 141, 3 
E. C. L. 63; French v. Weir, 17 U. 
C. Q. B. 245; Woody v. Pickard, 8 
Blackf. (Ind.) 55; Eastman v. Bur- 
leigh, 2 N. H. 484. 

"^ Stead V. Salt, 3 Bing. 101, 11 E. 
C. L. 58. 

»*Hallack v. March, 25 III. 48; 
Southard v. Steele, 3 T. B. Mon. 
(Ky.) 435; Wilcox v. Singletary, 
Wright (Ohio) 420; Gay v. Walt- 
man, 89 Pa. St. 453; Alexander v. 
Mulhall, 1 Tex. Unrep. Cas. 764. 

"= Adams v. Bankart, 1 C. M. & 
R. 681 T Davis v. Berger, 54 Mich. 652, 
20 N. W. 629 ; Mackay v. Bloodgood, 
9 Johns. (N. Y.) 285. 

""Baby v. Davenport, 3 U. C. Q. 
B. 54; McArthur v. Oliver, 53 Mich. 
299, 305, 19 N. W. 5. 

=' Tillinghast v. Gilmore, 17 R. I. 
413. 22 Atl. 942. 

==Karthaus v. Ferrer, 1 Pet. (U. 



S.) 222, 7 L. ed. 121. See also, 
Strangford v. Green, 2 Mod. 228; 
Jones V. Bailey, 5 Cal. 345 ; Arm- 
strong v. Robinson, 5 Gill. & J. (Md.) 
412; Harrington v. Higham, 13 Barb. 
(N. Y.) 660; Wood v. Shepherd, 2 
Patt. & H. (Va.) 442; Runyon v. 
Rutherford, 55 W. Va. 436, 47 S. E. 
150. 

''McElreath v. Middleton, 89 Ga. 
83, 14 S. E. 906; Jenkins v. Gillespie, 
10 Sm. & M. (Miss.) 31, 48 Am. 
Dec. 732; Pike v. Emerson, 5 N. H. 
393, 22 Am. Dec. 468; Gorham v. 
Gale, 7 Cow. (N. Y.) 739, 17 Am. 
Dec. 549; Coleman v. Grubb, 23 Pa. 
St. 393 ; Alexandria Canal Co. v. 
Swann, 5 How. (U. S.) 83, 12 L. ed. 
60; Clark v. Randall, 9 Wis. 135, Id 
Am. Dec. 252. See note 132 Am. 
St. 169, 171, as to authority of at- 
torneys to submit to arbitration. 

'"Mitchell v. Harris, 2 Ves. Jr. 129; 
Bates V. Visher, 2 Cal. 355 ; Daniels v. 
New London, 58 Conn. 156, 19 Atl. 
573, 7 L. R. A. 563; Jenkins v, Gil- 
lespie, 10 Sm. & M. (Miss.) 31; 48 
Am. Dec. 732 ; Stokely v. Robinson, 
34 Pa. St. 315; Markley v. Amos, 8 
Rich. L. (S. Car.) 468. 

"^ Cases holding mortgagee not 
bound : Bergman v. Commercial 



iSi' 



ARBITRATION. 



§ 2945 



all shall be bound by the award/^ and in some cases persons not 
parties to the record may join in submissions and become bound 
by the award.'" 

§ 2945. Requisites of submission. — As was said previously, 
a common-law submission need not be in any particular form, so 
long as it expresses the parties' intention.^* An express agree- 
ment to abide by the award is not necessary; such an agreement 
is implied from the fact of submission.^^ The mutual promises 
of competent parties to submit their controversies to arbitration 
are a sufficient consideration for each other.^" It was also said 
previously that an oral submission is valid where an oral agree- 
ment between the parties in the terms of the award would be 
good.''' The subject-matter of the submission must be set out 
with reasonable clearness, but the degree of certainty required in 
pleading is not necessary.^' It is not necessary to state the time 



Union Assur. Co., 92 Ky. 494, 13 Ky. 
L. 720, 18 S. W. 122, 15 L. R. A. 
270; Harrington v. Fitchburg Mut. 
Fire Ins. Co., 124 Mass. 126; Hall v. 
Fire Assn. of Philadelphia, 64 N. H. 
405, 13 Atl. 648; Browning v. Home 
Ins. Co., 71 N. Y. 508, 27 Am. Rep. 
86; Bronn v. Roger Williams Ins. Co., 
5 R. I. 394. Cases holding mortgagee 
bound : Chandos v. American Fire 
Ins. Co., 84 Wis. 184, 54 N. W. 390, 
19 L. R. A. 321. See also, Bruns- 
wick Sav. Inst. V. Commercial Union 
Ins. Co., 68 Maine 313, 28 Am. Rep. 
56; Martin v. Franklin Fire Ins. Co., 
38 N. J. L. 140, 20 Am. Rep. 372; 
Perry v. Lorillard Fire Ins. Co., 61 
N. Y. 214, 19 Am. Rep. 272. 

°^ Gregory v. Boston Safe-Deposit 
&c. Co., 36 Fed. 408; Turner v. 
Stewart, 51 W. Va. 493, 41 S. E. 924. 
See Mobile v. Wood, 95 Fed. 537, 
holding award entirely void because 
persons whose rights were involved 
were not parties to submission. Also 
see Hoste v. Dalton, 137 Mich. 522, 
100 N. W, 750, 11 Det. Leg. N. 392. 

'^ Morgan v. Miller, 6 Bing. N. Cas. 
168, 37 E. C. L. 565; Hawkins v. 
Benton, 9 Jur. 110, 2 Dowl. & L. 465, 
8 Q. B. 479, 55 E. C. L. 479, 15 L. J. 
Q. B. 139. 

^ See cases cited in note 19, § 2942. 
Payne v. Crawford, 97 Ala. 607, 10 



So. 911, 11 So. 725; Couch v. Har- 
rison, 68 Ark. 580, 60 S. W. 957; 
Somerset v. Ott, 207 Pa. St. 539, 56 
Atl. 1079. 

== Couch v. Harrison, 68 Ark. 580, 
60 S. W. 957; Robinson v. Templar 
Lodge No. 17, I. O. O. F., 97 Cal. 
62, 31 Pac. 609; Bundy v. Sabin, 1 
Root (Conn.) 411; Evans v. Mc- 
Kinsey, Litt. Sel. Cas. (Ky.) 262; 
Kingsley v. Bill, 9 Mass. 198; 
Whitcher v. Whitcher, 49 N. H. 176, 
6 Am. Rep. 486; Valentine v^ Val- 
entine, 2 Barb. Ch. (N. Y.) 430; Mc- 
Manus v. McCulloch, 6 Watts (Pa.) 
357; Smith v. Morse, 9 Wall. (U. 
S.) 76, 19 L. ed. 597; Stewart v. 
Cass, 16 Vt. 663, 42 Am. Dec. 534; 
Pierce v. Kirby, 21 Wis. 124. 

'"Wilkes v. Cotter, 28 Ark. 519; 
Bell V. Casey, 32 Ky. L. 1180, 108 S. 
W. 261; Woods v. Rice, 4 Mete. 
(Mass.) 81; Page v. Pendergast, 2 
N. H. 233 ; Curtis v. Gokey, 68 N. Y. 
300; Mayo v. Gardner, 49 N. Car. 
359; Wilcox v. Singletary, Wright 
(Ohio) 420; McManus v. McCulloch, 
6 Watts (Pa.) 357. See also, Mc- 
Goey V. Leamy, 27 Can. Sup. Ct. 545. 

" Notes 21, 22, 23, 24, § 2942. 

^ Brown v. Mize, 119 Ala, 10, 24 
So. 453; Payne v. Crawford, 97 Ala. 
604, 11 So. 725; Riley v. Hicks, 81 
Ga. 265, 7 S. E. 173 ; Zook v. Spray, 



2945 



ARBITRATION AND AWARD. 



152 



within which the award shall be made.''' In some way the persons 
to act as arbitrators should be designated,*" but not necessarily 
by name.*^ The validity of an agreement to arbitrate, in the 
courts of a state other than that in which it was made, is governed 
by the laws of the state where made.*^ Where the submission is 
under the statute, the provisions of the statute must be complied 
with strictly.*^ So in some states the arbitrators must be named 
in the submission,** the party making demand must make a state- 
ment thereof and annex it to the submission,*^ the submission 
must be acknowledged,*" must be under seal and attested,*' must 
contain an agreement for judgment to be entered upon the 
award,** must be in writing,*" must designate the court of entry 
of the award,^" or name the parties.'^ Where nothing appears 
to the contrary, the presumption is that the submission is in the 



38 Iowa 273; Shackelford v. Pur- 
ket, 2 A. K, Marsh. (Ky.) 435, 12 
Am. Dec. 422; Bodge v. Hull, 58 
:Maine 225 ; Skillings v. Coolidge, 14 
Mass. 43 ; Heglund v. Allen, 30 Minn. 
38, 14 N. W. 57; Price v. White, 27 
Mo. 275; Eastman v. Burleigh, 2 N. 
H. 484; Rixford v. Nye, 20 Vt. 132. 

""Curtis V. Potts, 3 M. & S. 145; 
Bent V. Erie Tel. &c. Co., 144 Mass. 
165, 10 N. E. 778; French v. Shack- 
ford, 5 N. H. 143; Rogers v. Tatum, 
25 N, J. L. 281. 

" Case V. Manufacturers' Fire &c. 
Co., 82 Cal. 263, 21 Pac. 843, 22 Pac. 
1083 ; Greiss v. State Invest. &c. Co., 
98 Cal. 241, 33 Pac. 195. 

"^It is sufficient to describe arbi- 
trators by name of office. Tancred v. 
Steel Co. of Scotland, L. R. 15 App. 
Cas. 125. 

*^ Green v. East Tennessee &c. R. 
Co., 37 Ga. 456 ; Titus v. Scantling, 4 
Blackf, (Ind.) 89. 

" See cases cited under notes 20, 27, 
§ 2942. 

"McKnight v. McCullough, 21 
Iowa ill; Western Female Seminary 
V. Blair, 1 Disney (Ohio) 370, 12 
Ohio Dec. 677; Franklin Min. Co. v. 
Pratt, 101 Mass. 359; Northwestern 
Guaranty Loan Co. v. Channell, S3 
Minn. 269, 55 N. W. 121 ; Hill v. Tay- 
lor, 15 Wis. 190. 

"Pierce v. Pierce, 30 Maine 113; 



Bullard v. Coolidge, 3 Mass. 324; 
Smith V. Kimball, 1 N. H. 72; Wil- 
cox V. Singletary, Wright (Ohio) 
420. 

"Franklin Min. Co. v. Pratt, 101 
Mass. 359; Davis v. Berger, 54 Mich. 
652, 20 N. W. 629; Northwestern 
Guaranty Loan Co. v. Channell, 53 
Minn. 269, 55 N. W. 121; Burkland 
V. Johnson, 50 Nebr. 858, 70 N. W. 
388; Atwood v. York, 4 N. H. 50; 
Smadbeck v. Mt, Vernon, 124 App. 
Div. (N. Y.) 515, 109 N. Y. S. 70; 
Gessner v. Minneapolis R. Co., 15 N. 
Dak. 560, 108 N. W. 786. 

"Parmelee v. Allen, 32 Conn. 115; 
Moody V. Nelson, 60 111. 229 ; Estep v. 
Larsh, 16 Ind. 82; Detroit v. Jackson, 
1 Doug. (Mich.) 106; Hollenback v. 
Fleming, 6 Hill (N. Y.) 303. 

«McKnight V. McCullough, 21 
Iowa 111; Moody v. Nelson, 60 111. 
229; Seaton v. Kendall, 171 111. 410, 
49 N. E. 561 ; McGunn v. Hanlin, 29 
Mich. 476. 

" See note 27, § 2942. 

""Foust v. Hastings, 66 Iowa 522. 
24 N. W. 22; Kendall v. Bates, 35 
Maine 357. Compare Woelfel v. 
Hammer, 159 Pa. St. 448, 28 Atl. 
147. Contra, Seaton v. Kendall, 61 
111. App. 289, affd. 171 111. 410, 49 N. 
E. 561. 

""Wesson v. Newton, 10 Cush. 
(Mass.) 114. 



153 



ARBITRATION. 



§ 2946 



prescribed form."^ It has been held that the statute should be 
liberally construed and that substantial compliance is all that is 
necessary,"*^ and that the right to object to noncompliance with 
the statute may be waived." It has also been held that there may 
be a conditional submission."' 



§ 2946. Amendment of submission. — The parties may 
amend or modify a submission at any time before the award is 
made."*" The terms of a written submission may be amended by 
parol. °^ If the submission is under the statute, any amendment 
must comply with the original requirements, in order that 
judgment may be entered on the award.°* The court cannot alter 
a submission made a rule of court, without the consent of the 
parties,^" except in so far as to add something, to which in effect, 
the parties agreed."" By consent of both parties, the arbitrators 
may be changed."^ One party alone has no right to change 
them."^ Where there is a rule of court, the court may not change 
the arbitrators without the parties' consent."" Where one arbitra- 



"' Brown v. Mize, 119 Ala. 10, 24 
So. 453. 

"^ Tuskaloosa Bridge Co. v. Jem- 
ison, 33 Ala. 476. 

"Hamon v. Jennings, 22 Maine 
240. 

""Merritt v. Thompson, 27 N. Y. 
225. 

"Shockley's Admr. v. Glasford, 6 
Dana (Ky.) 9; Nashua & L. R. Corp. 
V. Boston & L. R. Corp., 157 Mass. 
268, 31 N. E. 1060; Doane College v. 
Lanham, 26 Nebr. 421, 42 N. W. 405 ; 
George v. Farr, 46 N, H. 171; Free- 
man V. Adams, 9 Johns. (N. Y.) 115; 
Graham v. Graham, 9 Pa. St. 254, 49 
Am. Dec. 557; Woods v. Page, 37 
Vt. 252; Manlove v. Thrift, 5 Munf. 
(Va.) 493; Wilkinson v. Prichard, 
145 Iowa 65, 123 N. W. 964, Ann. Cas. 
1912A. 1259. 

"Nashua &c. R. Corp. v. Boston 
&c. R. Corp., 157 Mass. 268, 31 N. E. 
1060 ; French v. New, 28 N. Y. 147, 2 
Abb. Dec. (N. Y.) 209; Graham v. 
Graham, 9 Pa. St. 254, 49 Am. Dec. 
557 (modification by parol of sub- 
mission by specialty) ; Woods v. 
Page, 37 Vt. 252. See cases cited in 
previous note. 

"Wilkinson v. Prichard, 145 Iowa 



65, 123 N. W. 964, Ann. Cas. 1912A, 
1259; Burghardt v. Owen, 13 Gray 
(Mass.) 300; Franklin Min. Co. v. 
Pratt, 101 Mass. 359; Lazell v. 
Houghton, 32 Vt. 579. 

""Rawtree v. King, 5 Moo. C. P. 
167, 16 E. C. L. 391 ; Smurthwaite v. 
Richardson, IS C. B. (N. S.) 463, 
109 E. C. L. 463 ; Hickernell v. First 
Nat. Bank, 62 Pa. St. 146; Lazell v. 
Houghton, 32 Vt. 579; Rice v. Clark, 
8 Vt. 109. 

"Evans v. Senor, 5 Taunt. 662, 
1 E. C. L. 340; Vanderbyl v. Mc- 
Kenna, L. R. 3 C. P. 252; Morel v. 
Byrne, 28 L. T. 627; Thompsett v. 
Bowyer, 9 C. B. (N. S.) 284, 30 
L. J. C. P. 1, 99 E. C. L. 284. 

"^ Snodgrass v. Armbrester, 90 Ala. 
493, 7 So. 840; Browning v. Mc- 
Manus, 1 Whart. (Pa.) 177; Cooley 
v. Dill, 1 Swan. (Tenn.) 313; Man- 
love V. Thrift, 5 Munf. (Va.) 493. 
See Woodbury v. Proctor, 9 Gray 
(Mass.) 18; McClure v. Gulick, 17 N. 
J. L. 340. 

"'McCawley v. Brown, 12 B. Men. 
(Ky.) 132. 

'= Smith v. Warner, 14 Mich. 152; 
Girard v. Hutchinson, 2 Serg, & R. 
(Pa.) 188; Hills v. Home Ins. Co., 



S 2947 



ARBITRATION AND AWARD. 



154 



tor does not act, the others have no general power to appoint an- 
other in his place, but the substitution of arbitrators may be pro- 
vided for in the original submission."* The time within which 
the award is to be rendered may be extended."^ Such extension 
may be by parol where the submission was under seal,"" or an 
agreement to extend the time may be implied from the parties 
proceeding with the arbitration after the time set for rendering 
the award. "^ Arbitrators have no general power to extend the 
time,"^ but may be given express power,"" which, however, must 
be exercised before the former time limit has expired,'" and a 
direction as to the manner of extension must be complied with.'^ 
If there is an extension, the award must be made within the ex- 
tended time, unless there is a further extension.''^ It has been 
held that where there was an extension "until" a certain day, an 
award made on that day was valid." 

§ 2947. Revocation of submission. — The general rule is 
that a common-law submission may be revoked by either party at 
any time before award.'* This has been held even where the 



129 Mass. 345; Wilson v. Cross, 7 
Watts (Pa.) 49S. 

"Binsse v. Wood, 47 Barb. (N. 
Y.) 624, affd. Z1 N. Y. 526. 

"''Buntain V. Curtis, 27 111. 374. See 
cases cited in note 49, § 2952. 

■"Stephens v. Lowe, 9 Bing. 32, 23 
E. C. L. 473 ; Hill v. Taylor, 15 Wis. 
190. 

=' In re Hick, 8 Taunt. 694, 4 E. C. 
L. 340; Matthews v. Miller, 25 W. 
Va. 817. 

■« Mason v. Wallis, 10 Barn. & Cr. 
107, 21 E. C. L. 107; Denton v. 
Strong, L. R. 9 Q. B. 117; Lazell v. 
Houghton, 32 Vt. 579. 

°° See cases cited in note 49, ch. 3. 
Kirk V. Unwin, 6 Exch. 908; Burley 
V. Stephens, 1 M. & W. 156; Leggett 
V. Finlay, 6 Bing. 255, 19 E. C. L. 
122; Pavne v. Deakle, 1 Taunt. 509. 

"Good V. Wilks, cited in Tidd's 
Practice (4th Am. ed.) 827; Denton 
V. Strong, L. R. 9 Q. B. 117. 

" Leggett V. Finlay, 6 Bing. 255, 
19 E. C. L. 122; Holmes v. Taylor, 
33 Nova Scotia 415; Mason v. Wal- 
lis, 10 Barn. & Cr. 107, 21 E. C. L. 
54. 



" See note 4, § 2962. 

" See cases cited in § 2962, note 6, 
et seq. Kerr v. Jeston, 1 Dowl. (N. 
S.) 538; Knox v. Simmonds, 3 Bro. 
C. Ch. 358. 

"Cogswell V. Cogswell (Wash.), 
126 Pac. 431; Elliott Ev., § 1686; 
Home Fire Ins. Co. v. Kennedy, 47 
Nebr. 138, 66 N. W. 278, 53 Am. St. 
521 ; Pizzini v. Hutchins, 70 Misc. 
(N. Y.) 94, 127 N. Y. S. 1043; Will- 
iams V. Branning Mfg. Co., 153 N. 
Car. 7, 68 S. E. 902, 31 L. R. A. (N. 
S.) 679n, 138 Am. St. 637n, 21 Am. & 
Eng. Ann. Cas. 954 and note ; Yost v. 
McKee, 179 Pa. 381, 36 Atl. 317, 57 
Am. St. 604; McKenna v. Lvle, 155 
Pa. 599, 26 Atl. 777, 35 Am. St. 910; 
Key V. Norrod, 124 Tenn. 146, 136 S. 
W. 991. See note 138 Am. St. 640-649, 
on Revocation of Agreements to Ar- 
bitrate, reviewing many cases. Sid- 
linger V. Kerkow, 82 Cal. 42, 22 Pac. 
932; Randel v. Chesapeake & D. 
Canal Co., 1 Har. (Del.) 233; Mem- 
phis Trust Co. V. Brown-Ketcham 
Iron Works, 166 Fed. 398, 93 C C. 
A. 162; Parsons v. Arabos, 121 Ga. 
98, 48 S. E. 696; Heritage v. State, 



155 



ARBITRATION. 



§ 2947 



submission was under seal/'' or there was an action pending when 
the submission was made,'" or the submission provided that it 
might be made a rule of court," or was under the judge's order,'' 
or provided for an ex parte proceeding if one party did not ap- 
pear,'° or even, sometimes, when one party received a considera- 
tion,^" or when it was agreed that if one party failed to appoint 
an arbitrator, the other might act for him/^ It is usually held 
that even an express agreement that the submission is irrevocable 
does not prevent revocation/^ The general rule is that if made 
a rule of court, a submission is not revocable by one party/' The 



43 Ind. App. S95, 88 N. E. 114; Har- 
rison V. Hartford F. Ins. Co., 112 
Iowa n, 83 N. W. 820; Peter's 
Admr. v. Craig, 6 Dana (Ky.) 307; 
Gregory v. Pike, 94 Maine 27, 46 
Atl. 793; Boston &c. R. Corp. v. 
Nashua &c. R. Corp., 139 Mass. 463, 
31 N. E. 751 ; Chippewa Lumber Co. 
V. Phenix Ins. Co., 80 Mich. 116, 44 
N. W. loss ; Minneapolis & St. Louis 
R. Co. V. Cooper, S9 Minn. 290, 61 
N. W. 143 ; Jones v. Harris, 59 Miss. 
214; Donnell v. Lee, 58 Mo. App. 288; 
Butler V. Greene, 49 Nebr. 280, 68 
N. W. 496; Dinsmore v. Hanson, 48 
N. H. 413; Knaus v. Jenkins, 40 N. 
J. L. 288, 29 Am. Rep. 237; People 
V. Nash, 111 N. Y. 310, 18 N. E. 630, 
2 L. R. A. 180n, 7 Am. St. 747 ; Nor- 
fleet V. Southall, 7 N. Car. 189; 
Zehner v. Lehigh Coal Co., 187 
Pa. St. 487, 41 Atl. 464, 67 
Am. St. 586, 43 Wkly. Notes Cas. 
147; Sherman v. Cobb, IS R. I. 570, 
10 Atl 591; Bishop v. Valley Falls 
Mfg. Co., 78 S. Car. 312, 58 S. E. 
939; Rogers' Heirs v. Nail, 6 Humph. 
(Tenn.) 29; Sartwell v. Sowles, 72 
Vt. 270, 48 Atl. 11, 82 Am. St. 943; 
Rison V. Moon, 91 Va. 384, 22 S. E. 
165 ; Riley v. Jarvis, 43 W. Va. 43, 26 
S. E. Zdd. See also, King v. Joseph, 
5 Taunt. 452, 1 E. C. L. 236, 

'"Jones V. Harris, 59 Miss. 214; 
Allen V. Watson, 16 Johns. (N. Y.) 
205; Aspinwall v. Tousey, 2 Tyler 
(Vt.) 328. But see post note 99. 

™ But see post, note 99 ; Green v. 
Pole, 6 Bing. 443, 19 E. C. L. 203. _ 

"Johnson v. Andress, 5 Phila. 
(Pa.) 8, 19 Leg. Int. (Pa.) i1 ; 
Keavy v. Shisler, 8 Phila. (Pa.) 54. 

™ Green v, Pole, 6 Bing. 443, 19 E. 



C. L. 203; Clapman v. Highara, 1 
Bing. 87, 8 E. C. L. 415. 

"Boston &c. R. Corp. v. Nashua 
&c. R. Corp., 139 Mass. 463, 31 N. E. 
751. 

*" Jones V. Harris, 59 Miss. 214; 
People V. Nash, 111 N. Y. 310, 18 N. 
E. 630, 2 L. R. A. 180n, 7 Am. St. 
747. See Lewis's Appeal, 91 Pa. St. 
359, and Haley v. Bellamy, 137 Mass. 
357. It is held that, when founded 
on a valuable consideration, an agree- 
ment to arbitrate is irrevocable, in 
the cases of Guild v. Atchison, T. & 
S. F. R. Co., 57 Kans. 70, 45 Pac. 82, 
57 Am. St. 312, and Zehner v. Le- 
high Coal &c. Co., 187 Pa. St. 487, 
4 Atl. 464, a Am. St. 586. 

'^ Dickson Mfg. Co. v. American 
Locomotive Co., 119 Fed. 488; note 
138 Am. St. 643. 

'^ Dickson Mfg. Co. v. American 
Locomotive Co., 119 Fed. 488; Heri- 
tage V. State, 43 Ind. App. S9S, 88 
N. E. 114; People v. Nash, 111 N. Y, 
310, 18 N. E. 630, 2 L. R. A. 180n, 7 
Am. St. 747; Power v. Power, 7 
Watts (Pa.) 205; McKenna v. Lyle, 
155 Pa. St. 599, 26 Atl. m, 35 Am. 
St. 910; Toby v. Bristol, 3 Story (U. 
S.) 800, Fed. Cas. No. 14065; Sart- 
well V. Sowles, 72 Vt. 270, 48 Atl. 11, 
82 Am. St. 943. 

»^Bray v. English, 1 Conn. 498; 
Poppers V. Knight, 69 111. App. 578; 
Bash V. Christian, 11 Ind. 290, 84 
Ind. 180; Cumberland v. N. Yar- 
mouth, 4 Maine 459 ; Phillips v. Ship- 
ley, 1 Bland (Md.) 516; Haskell v. 
Whitney, 12 Mass. 47; Dexter v. 
Young, 40 N. H. 130; Bickham v. 
Denny, 1 N. J. L. 12; Tyson v. Rob- 
inson, 25 N. Car. 333; Lewis's Ap- 



2947 



'ARBITRATION AND AWARD. 



156 



court, however, may for sufficient cause grant leave to revoke 
the submission,*'* as for instance where an arbitrator refuses to 
act,*^ is making a mistake of law,*" persists in considering mat- 
ters outside the submission," where the arbitrator is corrupted,*' 
where an umpire was chosen by lot,*® or a party has become bank- 
rupt.°* The court may not grant leave to revoke after award." 
Neither may one of the parties revoke after award is made."^ 
Where a submission has been wrongfully revoked, the injured 
party has an action for damages for breach of the agreement to 
submit, or upon the submission bond.^^ Revocation must be made 
by a party or his authorized agent.'* The general rule is that where 
several have joined as parties on one side, any one of them may re- 



peal, 91 Pa. St. 359; Turner v. Stew- 
art, 51 W. Va. 493, 41 S. E. 924. See 
also, Zehner v. Lehigh Coal &c. Co., 
187 Pa. 487, 41 Atl. 464, 67 Am. St. 
586. Contra, Rouse v. Meier, L. R. 
6 C. P. 212; Haggett v. Welsh, 1 
Sim. 134. See Shawhan v. Baker 
(:\Io.), ISO S. W. 1096. 

" Faviell v. Eastern Counties R. 
Co., 2 Exch. 344; Great Western R. 
Co. V. Miller, 12 U. C. Q. B. 654; In 
re Woodcroft, 9 Dowl. 538; Scott v. 
Van Sandau, 1 Q. B. 102, 41 E. C. 
L. 456; Dexter v. Young, 40 N. H. 
130. 

■"Cooper V. Shuttleworth, 25 L. J. 
Exch. 114. 

"East & West India Dock Co. v. 
Kirk, L. R. 12 App. Cas. 738. 

" Faviell v. Eastern Counties R. 
Co., 2 Exch. 344. 

" Drew V. Leburn, 2 Macq. H. L. 1 

" European &c. Steam Shipping Co. 
V. Crosshey, 8 C. B. (N. S.) 397, 98 
E C L 397 

'" Gaffney v. Killen, 12 Ir. C. L. ap- 
pendix, p. XXV. 

" Phipps V. Ingram, 3 Dowl. 669. 

'"California Academy of Sciences 
V. Fletcher, 99 Cal. 207, 33 Pac. 855; 
Toledo Steamship Co. v. Zenith 
Transp. Co., 184 Fed. 391, 106 C. C. 
A. 501; Dilks v. Hammond, 86 Ind. 
563; Coon v. Allen, 156 Mass. 113, 
30 N. E. 83; Connecticut Fire Ins. 
Co. V. O'Fallon, 49 Nebr. 740, 69 N. 
W. 118; Clement v. Hadlock, 13 N. H. 
185 ; Williams v. Branning Mfg. Co., 
153 N. Car. 7, 68 S. E. 902, 31 L. R. 
A. (N. S.) 679n, 138 Am. St. 637 



and note, 2 Am. & Eng. Ann. Cases 
954 and note; McCune v. Lytle, 197 
Pa. St. 404, 47 Atl. 190; Tobey v. 
Bristol, 3 Story (U. S.) 800, Fed. 
Cas. No. 14065; Marsh v. Packer, 20 
Vt. 198; Levy v. Scottish Union &c. 
Ins. Co., 58 W. Va. 546, 52 S. E. 
449. 

*" California Academy of Sciences 
V. Fletcher, 99 Cal. 207, 33 Pac. 855 ; 
Rowley v. Young, 3 Day (Conn.) 
118; Cherrv v. Smith, 51 Ga. 558; 
Paulsen v. Manske, 126 111. 72, 18 N. 
E. 275, 9 Am. St. S32n; Harrison v. 
Hartford Fire Ins. Co., 112 Iowa 77, 
83 N. W. 820; Call v. Hagar, 69 
Maine 521; Pond v. Harris, 113 Mass. 
114; Coon v. Allen, 156 Mass. 113, 
30 N. E..83; Donnell v. Lee, 58 Mo. 
App. 288; Home Fire Ins. Co. v. 
Kennedy, 47 Nebr. 138, 66 N. W. 278, 
53 Am. St. 521; Blaisdell v. Blais- 
dell, 14 N. H. 78; People v. Nash, 111 
N. Y. 310, 18 N. E. 630, 19 N. Y. St. 
75, 2 L. R. A. 180n, 7 Am. St. 747; 
Miller v. Junction Canal Co., S3 
Barb. (N. Y.) 590, affd. 41 N. Y. 
98; Wood v. Lafayette, 46 N. Y. 484; 
Mentz V. Armenia Fire Ins. Co., 79 
Pa. St. 478, 21 Am. Rep. 80; Tobev 
V. Bristol, 3 Story (U. S.) 800, Fed. 
Cas. No. 14065 ; Hawley v. Hodge, 7 
Vt. 237. See cases cited in notes 
7, § 2941, and 38, § 2949. 

"Note 138 Am. St. 646. Parker 
V. Lees, 2 Keble 79 ; Madison Ins. Co. 
V. Griffin, 3 Ind. 277 ; Richards v. At- 
tleborough Nat. Bank, 148 Mass. 187, 
19 N. E. 353, 1 L. R. A. 781. 



157 



ARBITRATION. 



§ 2947 



voke the submission.®' In some states submissions under the stat- 
ute are irrevocable."" Revocations may be express, revocations in 
fact, or implied in law." A revocation in fact must be of equal 
dignity with the submission."* If the submission is under seal, 
it can only be revoked by an instrument under seal f^ if in writ- 
ing, it must be revoked in writing.^ A parol submission may- be 
revoked orally,^ and one who attempts to revoke a written sub- 
mission by parol, when sued for daanages, is estopped from de- 
fending on the ground that the revocation should have been in 
writing.^ A revocation to be effectual must be clear and uncon- 
ditional.* It has been held that notice must be given to the arbi- 
trators before the award is made to make the revocation effec- 
tual.'' A revocation implied by law arises when some event nec- 
essarily puts an end to the business before the arbitrators." 
Among such events are the death of an arbitrator,^ or his refusal 
to act,^ or the death before award of a party to a common-law 



"3 Vin Abr. Authority H. 1, 2, p. 
433; RoUe Abr., Authority D 1, 2, p, 
331; Hatheway v. Cliff, 7 N. Bruns. 
267; Brown v. Leavitt, 26 Maine 251; 
contra, Robertson v. McNiel, 12 
Wend. (N. Y.) 578. 

'^ Rouse V. Meier, L. R. 6 C. P. 212 
Bash V. Christian, 84 Ind. 180; 
Harrison v. Hartford Fire Ins. 
Co., 112 Iowa 77, 83 N. W. 820; Peo- 
ple V. Nash, 111 N. Y. 310, 18 N. E. 
630, 2 L. R. A. 180n, 7 Am. St. 747; 
Carey v. Montgomery County, 19 
Ohio 245 ; Rilev v. Jarvis, 43 W. Va. 
43, 26 S. E. 366. 

°' Williams v. Branning Mfg. Co., 
153 N. Car. 7, 68 S. E. 902, 31 L. R. 
A. (N. S.) 679n, 138 Am. St. 637 and 
note, 21 Am. & Eng. Ann. Cas. 954 
and note; Sutton v. Tyrrell, 10 Vt. 91. 
See note, 138 Am. St. 646. 

"'Shroyer v. Bash, 57 Ind. 349; 
Mullins V. Arnold, 4 Sneed (Tenn.) 
262. 

■^Shroyer v. Bash, 57 Ind. 349; 
Brown v, Leavitt, 26 Maine 251; 
Wallis V. Carpenter, 13 Allen (Mass.) 
19 ; Van Antwerp v. Stewart, 8 Johns. 
CN. Y.) 125; Home v. Welsh, 35 
Pa. Super. Ct. 569; Evans v. Cheek, 
3 Havn. CTenn.) 42: Sutton v. Tyr- 
rell 10 Vt, 91 ; McFarlane v. Cush- 
man, 21 Wis. 401. 



^Shroyer v. Bash, 57 Ind. 349; 
Mand v. Patterson, 19 Ind. App. 619, 
49 N. E. 974; Sutton v. Tyrrell, 10 
Vt. 91. 

= Sutton V. Tyrrell, 10 Vt. 91. 

' Hawley v. Hodge, 7 Vt. 237. 

*Steeve v. Brownell, 113 111. 415; 
Ck>odwine v. Miller, 32 Ind. 419; 
Brown v. Leavitt, 26 Maine 251 ; Bos- 
ton & L. R. Corp. v. Nashua &c. R. 
Corp., 139 Mass. 463, 31 N. E. 751; 
Frets v. Frets, 1 Cowen (N. Y.) 
335 ; Keyes v. Fulton, 42 Vt. 159. 

"Williams v. Branning Mfg. Co., 
153 N. Car. 7, 68 S. E. 902, 31 L. R. 
A. (N. S.) 679n, 138 Am. St. 637n, 
21 Am. & Eng. Ann. Cases, 954 and 
note ; Vynior's Case, 8 Coke 162 ; 
Frets V. Frets, 1 Cow. (N. Y.) 335; 
Buckwalter v. Russell, 119 Pa. St. 
495, 13 Atl. 310; McGheehen v. Duf- 
field, 5 Pa. St. 497. 

"Sutton V. Tyrrell, 10 Vt. 91. See 
note, 138 Am. St. 646. 

' Harper v. Abrahams, 4 Moore C. 
P. 3, 16 E. C. L. 353; Dinsmore v. 
Hanson, 48 N. H. 413; Wolf v. Au- 
gustine, 181 Pa. St. 576, 37 Atl. 574; 
Sutton v. Tyrrell, 10 Vt. 91. See 138 
Am. St. 647, note. 

= Parsons v, Ambos, 121 Ga. 98, 48 
S. E. 696; Chapman v. Seccomb, 36 
Maine 102; Donnell v. Lee, 58 Mo. 



§ 2947 ARBITRATION AND AWARD. 1 58 

submission.® But where the award is to be made a rule of court, 
the American rule is that the submission is not revoked by the 
death of a party, if the cause of action survives." Death of a 
party after award does not affect the award." As to whether 
the death of one of several parties on one side revokes the award, 
there is uncertainty.^^ A provision in a submission that death of 
a party shall not work a revocation is valid. ^^ At common law 
the marriage of a feme sole, party to a submission, worked a re- 
vocation.^"' It has been held that the conveyance to another of 
the subject-matter of a submission works a revocation.^^ The 
bankruptcy of one party in itself does not revoke the submis- 
sion," but is a ground for revocation by the other party." It is 
generally held that the institution of a suit upon the same sub- 
ject-matter submitted to arbitration impliedly revokes the submis- 
sion.^^ The wrongful revocation of a submission gives to the 

App. 288; Kimball v. Gilman, 60 N. "Andrews v. Palmer, 4 B. & Aid. 

H. 54. See Relyea v. Ramsay, 2 250, 6 E. C. L. 471; Charnley v. 

Wend. (N. Y.) 602. Winstanley, 5 East 266; Marseilles 

"Cooper V. Johnson, 2 B. & Aid. v. Kenton, 17 Pa. St. 238; Sutton v. 

394, 20 Rev. Rep, 483; Gregory v. Tyrrell, 10 Vt. 91. See note, 138 

Boston Safe-Deposit & Trust Co., 36 Am. St. 647. 

Fed. 408; Parsons v. Ambos, 121 Ga. " Calapooia Lumber Co. v. Rice, 

98, 48 S. E. 696; Citizens' Ins, Co. 58 Ore, 303, 112 Pac, 530, 

V, Coit, 12 Ind, App, 161, 39 N. E. "Andrews v. Palmer, 4 B. & Aid. 

766; Mooers v. Allen, 35 Maine 276, 250, 6 E. C. L. 471; Snook v, Hellyer, 

58 Am, Dec, 700 ; Whitfield v. Whit- 2 Chit. 43, 18 E. C. L, 493 : Hobbs v. 

field, 30 N. Car, 163, 47 Am, Dec. 350 ; Ferrars, 8 Dowl, 779, 4 Jur. 825. 

Bailey v, Stewart, 3 W. & S, (Pa,) " j\Iarsh v. Wood, 9 B. & C. 659, 

560, 39 Am. Dec. SO. See note 138 17 E, C. L. 468. 

Am. St. 646. " Paulsen v, Manske, 126 111. 72, 

" Bacon v. Crandon, 15 Pick. 18 N. E. 275, 9 Am, St. 532, affg. 24 

(Mass.) 79; Ruston v. Dunwoody's 111, App, 95. See note 138 Am, St.' 

Admrs,, 1 Bin, (Pa.) 42; Moore v. 648. Paulsen v, Manske, 24 111, .\pp, 

Webb, 6 Heisk. (Tenn.) 301 ; Wheat- 95, afifd, 126 111, 72, 18 N, E, 275, 9 

ley V, Martin's Admr,, 6 Leigh (Va,) Am, St, 532; Peters v. Craig, 6 Dana 

62, The contrary rule holds in Eng- (Ky,) 307; Nurney v. Fireman's 

land. Cooper v, Johnson, 2 B. & Fund Ins. Co., 63 Mich, 633, 30 N. W. 

Aid, 394. 350, 6 Am, St, 338; Kimball v, Gil- 

" Bash V. Christian, 77 Ind, 290; man, 60 N. H, 54; Commercial Union 

Baker v. Crockett, Hard. (Ky.) Assur. Co, v. Hacking, 115 Pa. St, 

(2d ed,) 396, 407, 8 Atl. 589, 2 Am, St. 562, Contra, 

'' Edmunds v. Cox, 2 Chit, 432, 18 Knaus v. Jenkins, 40 N, J. L, 288, 29 

E. C, L, 723; Matter of Hare, 6 Bing. Am. Rep, 237, See note 21 Am, & 

N, Cas. 158, 37 E. C, L. 559; Emer- Eng. Ann. _ Cas, 956 on Revocation 

son V, Udall, 8 Vt, 357. of Submission by Institution of Ac- 

" M'Dougal V, Robertson, 4 Bing, tion. Williams v. Branning I\Ifg. Co,, 

435, 13 E, C. L. 576; Tyler v, Jones, 3 153 N, Car, 7, 68 S, E, 902, 3rL. R, 

B, & C. 144, 10 E, C. L, 74; Bailey A, (N. S.) 679n, 138 Am. St, 637n, 21 

v, Stewart, 3 Watts & S. (Pa.) 560, Am, & Eng. Ann. Cas. 954 and note. 
39 Am. Dec. SO, 



159 



ARBITRATION. 



2948 



Other party a right of action for damages," or amounts to a 
breach entitling him to recover a penalty provided in a bond 
to abide by the award.^" There is, of course, no HabiHty for 
damage if revocation was through the death of a party, refusal 
of an arbitrator to serve or was for sufficient cause.^^ A party 
who has revoked may by his subsequent conduct waive such 
revocation.^^ It is held not ground for revocation after award 
that the award is not coextensive with the submission.^'' 

§ 2948, Effect of submission. — As a general rule, the sub- 
mission of a pending cause of action works a discontinuance of 
the action.^* It does not operate as a discontinuance if it is 
agreed in the submission that the award shall be entered as a 
judgment of the court.^° The rule is that submission of a pend- 
ing case is a waiver of objections to previous proceedings in the 
cause.^^ Where the matters embraced in a judgment from which 



"Brown v. Tauner, 1 C. & P. 651, 
12 E. C. L. 369; Miller v. Junction 
Canal Co., S3 Barb. (N. Y.) 590, 
affd. 41 N. Y. 98; Union Ins. Co. v. 
Central Trust Co., 157 N. Y. 633, 52 
N. E. 671, 44 L. R. A. 227; Pond v. 
Harris, 113 Mass. 114; Hawley v. 
Hodge, 7 Vt. 237. See cases cited in 
note 93, § 2947. 

="■ Warburton v. Storr, 4 B. & C. 
103, 10 E. C. L. SOD; Call v. Hagar, 
69 Maine 521 ; Dexter v. Young, 40 N. 
H. 130 ; Union Ins. Co. v. Central 
Trust Co., 157 N. Y. 633, 52 N. E. 
671, 44 L. R. A. 227; Craftsbury v. 
Hill, 28 Vt. la. 

'^ Stewart v. Williamson, 2 M. & 
P. 765; Marsh v. Wood, 9 B. & C. 
659, 17 E. C. L. 296; Bailey v. 
Stewart, 3 W. & S. (Pa.) 560, 39 
Am. Dec. 50; Brown v. Welcker, 1 
Coldw. (Tenn.) 197. 

'" Seely v. Pelton, 63 111. 101 ; Mc- 
Kenna v. Lyle, 155 Pa. St. 599, 26 
Atl. m, 35 Am, St. 910; Hathaway 
V. Strong, 2 Tyler (Vt.) 105. 

"= Frederick v. Margwarth, 221 Pa. 
418, 70 Atl. 191, 18 L. R. A. (N. S.) 
1246 and note. 

"^Draghicevich v. Vulicevich, Id 
Cal. 378, 18 Pac. 406; Perrigo Gold 
Min. &c. Co. V. Grimes, 2 Colo. 651; 
Cunningham v. Craig, 53 111. 252; 
Gilkerson v. Flower, 1 Bibb (Ky.) 



524; O'Bannon v. O'Bannon, 2 Ky. 
Dec. 60; Hearne v. Brown, 67 Maine 
156; Hill V. Hunnewell, 1 Pick. 
(Mass.) 192; Shawhan v. Baker 
(Mo.), 150 S. W. 1096; Bowen v. La- 
zalere, 44 Mo. 383 ; Wells v. Lain, 15 
Wend. (N. Y.) 99; Monroe Bank v. 
Widner, 11 Paige (N. Y.) 529, 43 
Am. Dec. 768 ; Eddings v. Gillespie, 
12 Pleisk. (Tenn.) 548; Rixford 
V. Nye, 20 Vt. 132; Sohns v. Slote- 
man, 85 Wis. 113, 55 N. W. 158. 
Contra, Nettleton v. Gridley, 21 Conn. 
531, 56 Am. Dec. 378; Callanan v. 
Port Huron &c. R. Co., 61 ^lich. 
IS, 27 N. W. 718; Dinsmore v. Han- 
son, 48 N. H. 413. See note 'Ann. Cas. 
1912A, 1263. 

''Davis V. Badders, 95 Ala. 348, 10 
So. 422; Perrigo Gold Mining &c. Co. 
V. Grimes, 2 Colo. 651 ; Wilkinson v. 
Prichard, 145 Iowa 65, 123 N. W. 964, 
Ann. Cas. 1912A, 1259 and note; 
Hearne v. Brown, 67 Maine 156; 
Shriver v. State, 9 Gill. & J. (]ild.)' 1; 
Lary v. Goodnow, 48 N. H. 170 ; 
Jacoby v. Johnston, 1 Hun (N. Y.) 
242, 3 Thomp. & C. 747; McMinn- 
ville & M. R. Co. v. Huggins, 3 Baxt. 
(Tenn.) 177. 

'"Hix V. Sumner, SO Maine 290; 
Ames V. Stevens, 120 Mass. 218 ; Van 
Derhoof v. Dean, 1 Mich. 463; Bo- 
zorth v. Pricket, 2 N. J. L. 268; 



§ 2949 



ARBITRATION AND AWARD. 



1 60 



appeal is pending are submitted to arbitration, the effect is to 
abandon the judgment and waive the appeal.^^ Since a submis- 
sion is revocable, a submission to arbitration, unless consummated 
by award, is not a bar to a suit or action on the matters em- 
braced in the submission, but an award is a bar.^* The effect of 
an agreement to submit future matters to arbitration has been 
previously discussed.^" 

§ 2949. Construction of submission. — The general rule is, 
that, since courts favor arbitration, they will construe submissions 
liberally, in order to carry out the intentions of the parties.^" All 
reasonable intendments are made in favor of submissions.^^ 



Waterman v. Connecticut & P. Rivers 
R. Co., 30 Vt. 610, n Am. Dec. 326; 
Ligon V. Ford, 5 Munf. (Va.) 10. 

" Baldwin v. Barrett, 4 Hun (N. 
Y.) 119, 6 Thomp. & C. 362; Gros- 
venor v. Hunt, 11 How. Pr. (N. Y.) 
355; Dolph v. Clemens, 4 Wis. 181; 
Jones V. Thomas, 120 Wis. 274, 91 
N. W. 950. 

=» Harris v. Reynolds, 7 Q. B. 71, 
S3 E. C. L. 71 ; Wright v. Evans, 53 
Ala. 103; Holmes v. Richet, 56 Cal. 
307, 38 Am. Rep. 54; tiall v. Nor- 
walk Fire Ins. Co., 57 Conn. 105, 17 
Atl. 356; Randel v. Chesapeake & D. 
Canal, 1 Har. (Del.) 233; Hanover 
Fire Ins. Co. v. Lewis, 28 Fla. 209, 
10 So. 297; Leonard v. House, 15 
Ga. 473; Crilly v. Phillip Rinn Co., 
135 111. App. 198; Kistler v. India- 
napolis &c. R. Co., 88 Ind. 460 ; Rich- 
ardson V. Emmert, 44 Kans. 262, 24 
Pac. 478; Shell v. Asher, 31 Ky. L. 
566, 102 S. W. 879; Dugan v. Thomas, 
79 Maine 221, 9 Atl. 354; AUegre v. 
Maryland Ins. Co., 6 Har. & J. (Md.) 
408, 14 Am. Dec. 289 ; Rowe v. Will- 
iams, 97 Mass. 163; Nurney v. Fire- 
mans Fund Ins. Co., 63 Mich. 633, 
30 N. W. 350, 6 Am. St. 338; Whitney 
V. Nat. Masonic &c. Assn., 52 Minn. 
378, 54 N. W. 184; Barnett v. El- 
wood Grain Co., 153 i\Io. App. 458, 
133 S. W. 856; Bales v. Gilbert, 84 
Mo. App. 675 ; Hoffl'e Fire Ins. Co. 
V. Kennedy, 47 Nebr. 138, 66 N. W. 
278. S3 Am. St. 521 ; Knaus v. Jenkins, 
40 N. J. L. 288, 29 Am. Rep. 237; 
Pitman v. Thompson, 63 N. H. 73; 
Haggart v. Morgan, 5 N. Y. 422. 55 
Am. Dec. 350; Commercial Union 



Assur. Co. V. Hocking, 115 Pa. 407, 
8 Atl. 589; Smith v. Thomson, 1 
Strob. (S. Car.) 344; McGavock v. 
Virginia Carolina Chemical Co., 114 
Tenn. 317, 86 S. W. 380; Daniher v. 
Grand Lodge A. O. U. W., 10 Utah 
110, Zl Pac 245; Welch v. Miller, 70 
Vt. 108, 39 Atl. 749 ; Corbin v. Adams, 
Id Va. 58; Kinney v. Baltimore &c. 
Relief Assn., 35 W. Va. 385, 14 S. E. 
8, 15 L. R. A. 142. See cases cited in 
note 17, § 2941. 

'° See §§ 2941, 2943. 

™Byrd v. Odem, 9 Ala. 755; In 
re Curtis, 64 Conn. 501, 30 Atl. 769, 
42 Am. St. 200; South Carolina R. 
Co. V. Moore, 28 Ga. 398, 73 Am. 
Dec. 778; Tucker v. Page, 69 111. 
179; Estep v. Larsh, 21 Ind. 190; 
McKinnis v. Freeman, 38 Iowa 364; 
Shockey's Admr. v. Glasford, 6 
Dana (Ky.) 9; Gordan v. Tucker, 6 
Greenl. (;\Iaine) 247; Richards v. 
Todd, 127 Mass. 167; Tucker v. Al- 
len, 47 Mo. 488 ; Ford v. Burleigh, 60 
N. H. 278; Wilhams v. Winans, 22 
N. J. Eq. 573 ; Jones v. Welwood, 71 
N. Y. 208; Hunter v. Anthony, 53 
N. Car. 385, 80 Am. Dec. 333; Gra- 
ham V. Graham, 9 Pa. St. 254, 49 
Am. Dec. 557; Cooley v. Dill, 1 Swan. 
(Tenn.) 313; Burchell v. Marsh, 17 
How. (U. S.) 344, 15 L. ed. 96; 
Wheeling Gas Co. v. Wheeling, 8 W. 
Va. 320; McCord v. Flynn, 111 Wis. 
78, 86 N. W. 668. See Robertson v. 
Marshall, 155 N. Car. 167, 71 S. E. 67. 

="Byrd V. Oden, 9 Ala. 755; Hop- 
son V. Doolittle, 13 Conn. 236; Rich- 
ards V. Todd, 127 Mass. 167; Joy v. 
Simpson, 2 N. H. 179; Jones v. Wei- 



i6i 



ARBITRATION. 



§ 2949 



Words used are interpreted according to their common mean- 
ing.'^ The submission is construed in the light of the circum- 
stances surrounding its making,"' and the parties' own interpreta- 
tion by their acts must be considered."* Parol evidence is not 
admissible to vary the terms of a written submission,"^ but may 
be used to explain a latent ambiguity."" A subsequent written 
submission merges a previous oral submission of the same mat- 
ters."^ A general submission is one whereby all present disputes 
and controversies between the parties are submitted,"" and such 
a submission has been held to include submission of both law and 
facts,"" of matters relating to realty as well as personalty,*" and 
even matters not in controversy as well as those which were.*^ 
But it does not include claims arising after the submission,*^ and 
involves only demands between the parties,*" though if several 
parties are on one side, it includes all claims joint or several which 
they may have against the parties on the other side.** Submis- 
sions have been held general, of "all matters" between parties,*^ 
of "all claims"*" "all demands" *^ of a specific matter and "divers 



wood, 71 N. Y. 208; Gonsales v. 
Deavens, 2 Yeates (Pa.) S39. 

''Munro v. Alaire, 2 Caines (N. 
Y.) 320; Slocum v. Damon, 1 Finn. 
(Wis.) S20. 

^'Jackson v. Hoffman, 31 La. Ann. 
97. 

=* Jones V. Thomas, 120 Wis. 274, 
97 N. W. 950. 

^° Edward Lloyd, Ltd., v. Sturgeon 
&c. Pulp Co., Ltd., 85 L. T. (N. S.) 
162 ; Palmer v. Green, 6 Conn. 14 ; 
McNear v. Bailey, 18 Maine 251; 
Fdrber v. Chamberlain, 29 N. H. 405 ; 
De Long v. Stanton, 9 Johns. (N. Y.) 
38. 

^ Riley V. Hicks, 81 Ga. 265, 7 S. 
E. 173; Shackelford v. Purket, 2 A. 
K. Marsh (Ky.) 435, 12 Am. Dec. 
422. 

" Loring v. Alden, 3 Mete. (Mass.) 
576; Symonds v. Mayo, 10 Cush. 
(Mass.) 39. 

='Overby v. Thrasher, 47 Ga. 10; 
Merritt v. Merritt, 11 111. 565; Adams 
V. Macfarlane, 65 Maine 143; Jones 
V. Welwood, 71 N. Y. 208; Barker 
V. Belknap, 39 Vt. 168. 

="> Indiana Cent. R. Co. v. Bradley, 7 



Ind. (Porter) 49; Johnson v. Noble, 
13 N. H. 286, 38 Am. Dec. 485. 

"Marks v. Marriott, 1 Ld. Raym. 
114;, Sellick v. Addams, IS Johns. (N. 
Y.) 197; Munro v. Alaire, 2 Caines 
(N. Y.) 320; Byers v. Van Deusen, 5 
Wend. (N. Y.) 268; Gratz v. Gratz, 
4 Rawle (Pa.) 411. 

" Delong V. Stanton, 9 Johns. (N. 
Y.) 38. 

"'Cockburn v. Newton, 2 M. & G. 
899, 40 E. C. L. 912; Bixby v. Whit- 
ney, 5 Greenl. (Maine) 192; Thrasher 
V. Haynes, 2 N. H. 429; Cutting v. 
Whittemore, 12 N. H. 107, 54 Atl. 
1098; Graham v. Graham, 9 Pa. St. 
254, 49 Am. Dec. 557. 

*' Fisher v. Pirabley, 11 East. 188; 
Adams v. Adams, 8 N. H. 82. 

"Thomlinson v. Arriskin, 1 Comyns 
328; Stockley v. Shopland, 26 L. T. 
(N. S.) 586. 

'"Bryant v. Fisher, 85 N. Car. 69. 

"Donican v. Mulry, 69 Iowa 583, 
29 N. W. 612. 

"Cheshire Bank v. Robinson, 2 N. 
H. 126; Byers v. Van Deusen, 5 
Wend. (N. Y.) 268. 



11 — Contracts, Vol. 4 



§ 29SO ARBITRATION AND AWARD. 1 62 

Other matters"/^ for, where there is doubt, the presumption is 
that all matters in dispute were intended to be decided.*^ Where 
there is a submission of specific matters, and not of all demands, 
that is, a special submission, the terms of the submission govern 
the matters included,"" and those are considered included which 
the parties intended."^ Submission of a pending action is usually 
construed to include whatever might properly be litigated in the 
action," but no other matters, unless by express agreement.'^ 
There is a distinction between the submission of "all matters in 
dispute between the parties in the cause" and "all in dispute in the 
cause between the parties."" 

§ 2950. Who may be arbitrators. — The functions of an ar- 
bitrator are in the nature of those of a judge and he has been 
called a quasi-judge,^ but he is not an officer of the court, even 
where judgment of the court may be entered on the award, ^ nor 
is he an agent of the parties, or of one party.^ The general rule 
is that any person is qualified to act as an arbitrator, and neither 
natural nor legal disabilities disqualify.* So a woman, married 

"Munro V. Alaire, 2 Caines (N. necticut & P. Rivers R. Co., 30 Vt. 

Y.) 320. 610, 1Z Am. Dec. 326; Cook v. Car- 

" Jones V. Welwood, 71 N. Y. 208. penter, 34 Vt, 121, 80 Am. Dec. 670. 

°° Baker v. Townshend, 7 Taunt. See cases cited in notes 21, 22, § 2944. 

422, 2 E. C. L. 422; Fowler v. Jack- '^Fitzgerald v. Fitzgerald, Hard, 

son, 86 Ga. 337, 12 S. E. 811; Tucker (Ky.) 227: Merrill v. Gold. 1 Cush. 

V. Page, 69 111. 179; Osborne v. (Mass.) 457; Backman v. Reigart. 3 

O'Reilly, 42 N. J. Eq. 467, 9 Atl. 209; Pen. & W. (Pa.) 270; Smith v. Kin- 

Stinesville & B. Stone Co. v. White, caid, 7 Humph. (Tenn.) 28; Fulton 

32 Misc. (N. Y.) 135, 65 N. Y. S. v. Wiley, 32 Vt. 762; Harrison v. 

609; Bryan v. Jeffreys, 104 N. Car. Wortham, 8 Leigh (Va.) 296. 

242, 10 S. E. 167; Knickerbocker Ice "Malcolm v. FuUarton. 2 T. R. 

Co. V. Smith, 147 Pa. St. 248, 23 Atl. 645; Smith v. MuUer, 3 T. R. 624; 

563; Henniken v. Brown, 4 Baxt. Backman v. Reigart, 3 Pen. W. (Pa.) 

(Tenn.) 397; Bowden v. Crow, 2 270. 

Tex. Civ. App. 591, 21 S. W. 612; ^Spearman v. Wilson, 44 Ga. 473; 

Rixford v. Nye, 20 Vt. 132; Pollock's Strong v. Strong, 9 Cush. (Mass.) 

Admr. v. Sutherlin, 25 Grat. (Va.) 560. 

78; Swann v. Deen, 4 W. Va. 368; ^In re Castle-Curtis Arbitration, 64 

McCord V. Flynn, 111 Wis. 78, 86 Conn. 501, 30 Atl. 769, 42 Am. St. 200 ; 

N. W. 668. Farrington v. Hamblin, 12 Wend. (N. 

"'Adams v. Adams, 8 N. H. 82; Y.) 212. 

Burleigh v. Ford, 59 N. H. 536. ' Calcraft v. Roebuck, 1 Ves. Jr. 

"^= Newton v. West, 3 Mete. (Ky.) 221; Wilkins v. Van Winkle, 78 Ga. 

24; Merrill v. Gold, 1 Cush. (Mass.) 557, 3 S. E. 761; Strong v. Strong, 

457; McCune v. Lytle, 197 Pa. St. 9 Cush. (Mass.) 560; Collins v. 

404, 47 Atl. 190; New York & C. R. Oliver, 4 Humph. (Tenn.) 439. 

Co. V. Myers, 18 How. (U. S.) 246, * Russell Awards (4th ed) 102; 

15 L. ed. 380; Waterman v. Con- Davis v. Forshee, 34 Ala. 107; Evans 



1 63 



ARBITRATION. 



2950 



or single, may be an arbitrator/ and the judge of the court in 
which the cause is pending is not disqualified.^ An unincorpo- 
rated society has been held competent/ as also a committee of a 
board of trade.® The submission may provide certain qualifica- 
tions," and certain persons may be incompetent by statute," or 
public policy.^^ If an arbitrator is biased in favor of one party, 
and the other party is ignorant of such fact until after the award 
is made, the award is invalid.^^ So the award may be invalid 
where the arbitrator has previously formed an opinion,^^ where 
he has an interest in the controversy,^* is closely related to one 
of the parties,^" or under the influence of one party because of 



V. Ives, IS Phila. (Pa.) 635, 38 Leg. 
Int. 393. A sheriff may be an ar- 
bitrator. Sharp V. Dusenbury, Coletn. 
Cas. (N. Y.) 134, Colem. & C. Cas. (N. 
Y.) 134,2 Johns. Cas. (N. Y.) 117. So 
may ministers of government, Ger- 
non V. Cochran, Bee Adm. (tJ. S.) 
209, 10 Fed. Cas. No. 5368; or a 
deaf person, McMillan v. Allen, 98 
Ga. 405, 25 S. E. SOS, or members of 
an ecclesiastical court, Poggenburg 
v. Conniff, 23 Ky. L. 2463, 67 S. W. 
845. 

°Kyd's Award (1st Am. ed.) 71; 
Evans v. Ives, 15 Phila. (Pa.) 635, 
38 Leg. Int. 393. See note 38 L. R. 
A. 210. 

'Galloway v. Webb, Hard. (Ky.) 
318; Hopkins v. Sodonskie, 1 Bibb 
(Ky.) 148; Hughes v. Peaslee, 50 
Pa. St. 257; Walworth County Bank 
v. Farmers' Loan & Trust Co., 22 
Wis. 231. 

'"The Society of Inspectors of 
Poor for Scotland," was held a proper 
arbitrator of a question referred to 
it by two parishes as to the main- 
tenance of a pauper, in Rathven v. 
Elgin, 2 H. L. Sc. App. Cas. 535. 

'Vaughn v. Herndon, 91 Tenn. 64, 
17 S. W. 793. 

"Jungheim v. Foukelmann (1909), 
2 K. B. 948. 

"Gallagher v. Kern, 31 Mich. 138. 

"For reasons of public policy, a 
judge may not appoint himself ar- 
Ijitrator. Drew v. Canady, 1 Mass. 
158; Drew v. Mulikin, 5 N. H. 153. 

"Kemp V. Rose, 1 Giff. 258; Sil- 
ver V. Connecticut R. Lumber Co., 40 
Fed. 192; Bash v. Christian, 11 Ind. 



290; Craft v. Thompson, 51 N. H. 
536; Western Female Seminary v. 
Blair, 1 Disney (Ohio) 370, 12 Ohio 
Dec. 677. But if the party has knowl- 
edge of such bias, the award is not 
invalid. Wheeling Gas Co. v. Wheel- 
ing, 5 W. Va. 448; Fox v. Hazelton, 
10 Pick. (Mass.) 275. Elliott Evi- 
dence, § 1667. 

'^ Conrad v. Massasoit Ins. Co., 4 
Allen (Mass.) 20; Beattie v. Hilliard, 
55 N. H. 428; Smith v. Cooley, 5 
Daly (N. Y.) 401; Western Female 
Seminary v. Blair, 1 Disney (Ohio) 
370, 12 Ohio Dec. 677; Bowen v. 
Steere, 6 R. I. 251 ; Taber v. Jenny, 
1 Sprague (U. S.) 315, 23 Fed, Cas. 
13720. Compare Brush v. Fisher, 70 
Mich. 469, 38 N. W. 446, 14 Am. St. 
510; Morville v. American Tract. 
Soc, 123 Mass. 129. 25 Am. Rep. 40 ; 
Graves v. Fisher, 5 Greenl. (Maine) 
69, 17 Am. Dec. 203. See National 
Fire Ins. Co. v. O'Bryan, 75 Ark. 198, 
87 S. W. 129, 5 Am. & Eng. Ann. Cas. 
334. 

"Milnor v. Georgia, R. &c. Co., 4 
Ga. 385; Strong v. Strong, 12 Cush. 
(Mass.) 135; Leominster v. Fitch- 
burg &c. R. Co., 7 Allen (Mass.) 38; 
Williams v. Chicago &c. R. Co., 112 
Mo, 463, 20 S, W. 631, 34 Am. St. 
403; Pearson v. Barringer, 109 N. 
Car. 398, 13 S. E. 942; Connor v. 
Simpson, 4 Sad. (Pa,) lOS, 7 Atl. 161. 

" Spearman v. Wilson, 44 Ga. 473 ; 
Pool V. Hennessy, 39 Iowa 192, 18 
Am. Rep. 44: Stinson v. Davis, 20 
Ky. L. 1942. SO S, W, 550; Brown v. 
Leavitt, 26 Maine 251 ; Stephenson v. 
Oatman, 3 Lea (Tenn.) 462, 



§ 2951 



ARBITRATION AND AWARD. 



164 



business relations," if, in all these instances, the other party was 
ignorant of the disqualification. But if a business relationship 
is not so close as to give evidence of partiality, the award will 
not be set aside," and where a party knows before submission, 
or learns after submission, of facts which would make an arbitra- 
tor incompetent, and then proceeds with the arbitration, he is 
held to have waived such objection.^' 

§ 2951. Appointment and oath. — In general, arbitrators 
must be appointed by the parties, or with their consent, and if 
not appointed in the submission, must be appointed in accordance 
with its provisions,^'' or in accord with statutory requirements.^" 
Attendance of proceedings before acting arbitrators without ob- 
jection to their authority is a waiver of any irregularity in their 
appointment.^^ Parties may by a subsequent agreement submit 



" Vineburg v. Guardian Fire Assur. 
Co., 19 Ont. App. 293 ; Ex parte Abell, 
21 Can. L. T. 511, 2 N. Burns. Eq. 
271 ; ^tna Ins. Co. v. Stevens, 48 111. 
31 ; Bradshaw v. Agricultural Ins. 
Co., 62 Hun (N. Y.) 619, 42 N. Y. 
St. 79, 16 N. Y. S. 639. 

" For instance, where an arbitrator 
and one of the parties were landlord 
and tenant (Fisher v. Towner, 14 
Conn. 26) ; or the arbitrator was a 
creditor of one party (Wallis v. Car- 
penter, 13 Allen (Mass.) 19; Bull- 
man V. North British & Mercantile 
Ins. Co., 159 Mass. 118, 34 N. E. 169. 
[Compare Rand v. Redington, 13 N. 
H. 72, 38 Am. Dec. 475, where a 
large award in favor of an insolvent 
debtor of the arbitrators was set 
aside] ) ; or a debtor of one party 
(Anderson v. Burchett, 48 Kans. 153, 
29 Pac. 315) ; or an attorney for one 
party (Goodrich v. Hulbert, 123 
Mass. 190, 25 Am. Rep. 60). Compare 
Sumner v. Barnhill, 12 Nova Scotia 
501. 

"Matthew v. Ollerton, Comb. 218, 
4 Mod. 226; Duvall v. Sulzner, 155 
Fed. 910 ; Hubbard v. Hubbard, 61 111. 
228; Indiana Ins. Co. v. Brehra, 88 
Ind. 578; Anderson v. Burchett, 48 
Kans. 153, 29 Pac. 315; Brown v. Lea- 
vitt, 26 Maine 251 ; Galbreath v. Gal- 
breath. 10 Kv. L. 935; Baltimore & 
O. R. Co. v. Ganton Co., 70 Md. 405, 
17 Atl. 894; Fox v. Hazelton, 10 



Pick. (Mass.) 275; Estice v. Cock- 
erell, 26 Miss. 127; Williams v. Chi- 
cago &c. R. Co., 112 Mo. 463, 20 S. 
W. 631, 34 Am. St. 403; Noyes v. 
Gould, 57 N. H. 20; Pearson v. Bar- 
ringer, 109 N. Car. 398, 13 S. E. 942 ; 
Bobb V. Brachman, 38 Ohio St. 423; 
Stenmer v. Scottish Union &c. Ins. 
Co., 33 Ore. 65, 49 Pac. 288, 53 Pac. 
498; Monongahela Nav. Co. v. Fen- 
Ion, 4 Watts & S. (Pa.) 205; Dough- 
erty v. McWhorter, 7 Yerg. (Tenn.) 
239 ; Wheeling Gas Co. v. Wheeling, 

5 W. Va. 448. 

"WilHams v. Schmidt, 54 111. 205; 
Burleigh v. Ford, 61 N. H. 360 : Cop- 
per V. Wells, 1 N. J. Eq. 10. An 
award made by arbitrators, one of 
whom was appointed without consent 
of one party to the arbitration, will 
not be enforced by the courts. Proc- 
tor V. Blakely Oil Co., 137 Ga. 407, 
73 S. E. 378. Note 138 Am. St. 648. 

™Eyre v. Liecester (1892), L. R 
1 Q. B. 136, 56 J. P. 228, 61 L. J. Q. 
B. 438, 65 L. T. (N. S.) 733, 40 
Wkly. Rep. 203; In re Joshua Hendy 
Mach. Works, 9 Gal. App. 610. 99 
Pac. 1110; Jones v. Bond, 76 Ga, 517; 
Franklin Mining Co. v. Pratt, 101 
Alass. 359. 

■' Harcourt v. Ramsbottom, 1 Jac 

6 W. 435; Brewer v. Bain, 60 Ala. 
153; Hays v. Hays, 23 Wend. (N. 
Y.) 363. 



i65 



ARBITRATION. 



§ 2951 



to a different number of arbitrators than originally agreed upon." 
So by consent of both parties there may be a substitution of others 
for persons originally chosen.-^ It is not necessary at common 
law that an arbitrator be sworn, and no oath is required, unless 
so stipulated in the submission.^* In some states, an oath is pre- 
scribed by statute, and unless there is a waiver of the require- 
ment, a failure to swear the arbitrators makes the award in- 
valid.^^ Only a substantial compliance with the form of oath 
prescribed by the statute is essential.^" In the absence of evi- 
dence, the presumption is that the oath was properly adminis- 
tered as required by the statute.^^ Some cases hold the oath juris- 
dictional and that the parties cannot waive the failure to swear 
the arbitrators,^^ but most hold that the parties may waive the 
• taking of an oath.^® Such waiver may be implied, when the par- 
ties, knowing no oath was taken, appear before the arbitrators, 
and without objection, proceed with the hearing,^" but if the 



'" Blanchard v. Murray, 15 Vt. 548. 

■^ Chapman v. Ewing, 78 Ala. 403; 
McCawley v. Brown, 12 B. Mon. 
(Ky.) 132; Goldman v. Goldman, SO 
La. Ann. 29, 22 So. 967; Brigham v. 
Packard, 116 Mass. 195; Hills v. 
Home Ins. Co., 129 Mass. 345; Mc- 
Clure V. Gulick, 17 N. J. L. 340; Be- 
mus V. Clark, 29 Pa. St. 251. 

^* Gardner v. Newman, 135 Ala. 
522, 33 So. 179; Lilley v. Tuttle 
(Colo.) 117 Pac. 896; Stewart v. 
Grier, 7 Houst. (Del.) 378, 32 Atl. 
328; Southern Live Stock Co. v. Ben- 
jamin, 113 Ga. 1088, 39 S. E. 489; 
Kankakee & S. W. R. Co. v. Al- 
fred, 3 III. App. 511; Dickerson v. 
Hays, 4 Blackf. (Ind.) 44; Williams 
V. Perkins, 83 Mo. 379; Greer v. Can- 
field, 38 Nebr. 169, 56 N. W. 883; 
Browning v. Wheeler, 24 Wend. (N. 
Y.) 258, 35 Am. Dec. 617; State v. 
Jackson, 36 Ohio St. 281 ; Warren v. 
Tinsley, 53 Fed. 689, 3 C. C. A. 613; 
Wilkins V. Van Winkle, 78 Ga. 557, 3 
S. E. 761; Overton v. Alpha, 13 La. 
Ann. 558 ; Leahey v. Dugdale, 41 Mo. 
517; Inslee v. Flagg, 26 N. J. L. 368, 
69 Am. Dec. 580; Combs v. Little, 4 
N. J. Eq. 310, 40 Am. Dec. 207; Day 
V. Hammond, 57 N. Y. 479, 15 Am. 
Rep. 522. 

^ See Dore v. Southern Pac. Co. 
(Cal.), 124 Pac. 817. 



=°Sisson V. Pittman, 113 Ga. 166, 
38 S. E. 315 ; Snyder v. Rouse, 1 
!Metc. (Ky.) 625; Vaughn v. Graham, 
11 Mo. 575; Caldwell v. Brooks Ele- 
vator Co., 10 N. Dak. 575, 88 N. W. 
700. 

''Mills V. Atlantic &c. R. Co., 4 
Montreal Super. Ct. 302; Callahan v. 
McAlexander, 1 Ala. 366; Price v. 
Kirby, 1 Ala. 184; Aills v. Voirs, 1 
A. K. :Marsh. (Ky.) 190; Offeciers v. 
Dirks, 2 Tex. 468. 

"'Tennessee Coal, I. & R. Co. v. 
Roussell, 155 Ala. 435, 46 So. 866, 130 
Am. St. 56; Hepburn v. Jones, 4 
Colo. 98; Rhodes v. Ward, 17 Ky. L. 
875, 32 S. W. 950 ; Overton v. Alpha, 
13 La. Ann. 558; Walt v. Huse, 38 
Mo. 210; Inslee v. Flagg, 26 N. J. L. 
368, 69 Am. Dec. 580. 

^ Tennessee Coal Co. v. Roussell, 
155 Ala. 435, 46 So. 866, 130 Am. St. 
56; Kankakee &c. R. Co. v. Alfred, 
3 111. App. 511; Older v. Quinn, 89 
Iowa 445, 56 N. W. 660; Russell v. 
Seery, 52 Kans. 736, 35 Pac. 812; 
Tucker v. Allen, 47 Mo. 488 ; Day v. 
Hammond, 57 N. Y. 479, 15 Am. Rep. 
522; Rice v. Hassenpflug, 45 Ohio St. 
377, 13 N. E. 655; Hill v. Taylor, 15 
Wis. 190; Anderson v. Fort Worth, 
83 Tex. 107, 18 S. W. 483. 

=° Kankakee &c. R. Co. v. Alfred, 
3 111. App. 511; Kelsey v. Darrow, 22 



§ 2952 



ARBITRATION AND AWARD. 



1 66 



Statute prescribes a particular form of waiver, such must be fol- 
lowed.^^ 

§ 2952. Authority and power of arbitrators. — An arbitra- 
tor's position being quasi-judicial, he should be impartial like a 
judge.^^ So awards are set aside which are the result of partisan- 
ship.^^ Under a general submission, arbitrators may decide ques- 
tions of law, as well as of fact,^* and are not bound by the rules of 
law and equity, but may disregard these in order to do justice as 
seems best to them in the particular case.^'^ They have no power 
to delegate their authority to others,^" and their joint duties can- 
not be delegated by one or more to the others.^' They may seek 



Hun (N. Y.) 125; Hackney v. Adam 
(N. Dak.), 127 N, W. 519; Rice v. 
Hassenpflug, 45 Ohio St. 377, 13 N. 
E. 655; Newcomb v. Wood, 97 U. S. 
581, 24 L. ed. 1085. 

'' Flannery v. Sahagian, 134 N. Y. 
85, 31 N. E. 319. 

'' Hoosac Tunnell, Dock &c. Co. v. 
O'Brien, 137 Mass. 424, 50 Am. Rep. 
323; Grosvenor v. Flint, 20 R. I. 21, 

37 Atl. 304; Benjamin v. United 
States, 29 Ct. CI. (U. S.) 417. 

" Sisson V. Pittman, 113 Ga. 165, 

38 S. E. 315; Bash v. Christian, 77 
Ind. 290 ; Sullivan v. Fink, 3 Iowa 
66; Douney v. Atchison, T. & S. F. 
R. Co., 60 Kans. 499, 57 Pac. 101; 
jNIorville v. American Tract Society, 
123 Mass. 129, 25 Am. Rep. 40; Smith 
V. Cooley, 5 Daly (N. Y.) 401; Gros- 
venor V. FHnt, 20 R. I. 21, 37 Atl. 
304; Glover v. Rochester-German 
Ins. Co., 11 Wash. 143, 39 Pac. 380; 
Wheeling Gas Co. v. Wheeling, 5 W. 
Va. 448. 

"' Indiana Cent. R. Co. v. Bradley, 
7 Ind. 49; Whitmore v. Le Ballistier, 
35 Maine 488; Bigelow v. Newell, 10 
Pick. (Mass.) 348; Johnson v. Noble, 
13 N. H. 286, 38 Am. Dec. 485; 
Fudickar v. Guardian Mut. L. Ins. 
Co., 62 N. Y. 392; Ormsby's Admrs. 
V. Bakewell, 7 Ohio 98; Kleine v. 
Catara, 2 Gall. (U. S.) 61, Fed. Cas. 
7869; Chandos v. American Fire Ins. 
Co., 84 Wis. 184, 54 N. W. 390, 19 L. 
R. A. 321. See cases cited in note 
39, § 2949. 

^° Kirten v. Spears, 44 Ark 166; 
Muldrow V. Norris, 2 Cal. 74, 56 Am. 
Dec. 313; Hall v. Norwalk F. Ins. 



Co., 57 Conn. 105, 17 Atl. 356; Hays 
V. Miller, 12 Ind. 187; Bird v. Lay- 
cock, 7 La Ann. 171 ; Tyler v. Dyer, 
13 Maine 41 ; Smith v. Boston & M. 
R. Co., 16 Gray (Mass.) 521; Chi- 
cago & Mich. Lake Shore R. 
Co. V. Hughes, 28 Mich 186 ; Mitchell 
V. Curran, 1 Mo. App. 453 ; Clark 
Millinery Co. v. National Union Fire 
Ins. Co. (N. Car.), 75 S. E. 944. See 
In re Curtis, 64 Conn. 501, 30 Atl. 
769, 42 Am. St. 200. See also, Leslie v. 
Leslie, 50 N. J. Eq. 103, 24 Atl. 319; 
Jackson v. Ambler, 14 Johns. (X. Y.) 
96; Henry v. HiUiard, 120 N. Car. 
479, 27 S. E. 130; Dixon's Lessee v. 
Morehead, Add. (Pa.) 216: Jocelyu 
v. Donnel, Peck (Tenn.) 274, 14 Am. 
Dec. 753; Remelee v. Flail, 31 Vt. 582, 
76 Am. Dec. 140; Willoughbv v. 
Thomas, 24 Grat. (Va.) 521; School 
Dist. V. Sage, 13 Wash. 352, 43 Pac. 
341; McCord v. Flynn, 111 Wis. 78, 
86 N. W. 668. 

^-Lell V. Hardesty, 13 Ky. L. (ab- 
stract) 831 ; Wilson v. York & M. L. 
R. Co., 11 Gill. & J. (Md.) 58; 
Haven v. Winnisimmet Co.. 11 Al- 
len (Mass.) 377, 8,7 Am. Dec. 723; 
David Harlev Co. v. Earnefield, 22 
R. I. 267, 47 Atl. 544 : Potter v. Ster- 
rett, 24 Pa. St. 411; Wright v. Meyer 
(Tex.), 25 S. W. 1122; Weehs v. 
Baynton, 37 Vt. 297. 

"Dunphy v. Ford, 2 i\Iont. 300; 
Little V. Newton, 9 Dowl. P. C. 437, 5 
Jur. 246, 10 L. J. C. P. 88, 2 U. & 
G. 351, 2 Scott N. R. 159, 40 E. C. L. 
637: Horton v. Pool, 40 Ala. 629; 
Hoff V. Blossom, 18 N. Y. Super. Ct, 
559. 



i67 



ARBITRATION. 



§ 2952 



the advice of outsiders as to the matters before them, but since 
they are selected to use their own judgment, they should not de- 
cide a case on outside judgment unless it coincides with their 
own views.'^ They may employ assistance in merely ministerial 
duties,^* as a clerk or accountant, or aids in the measurement of 
land or sale of property authorized by the submission. The 
authority of arbitrators terminates when the award is completed, 
whether or not it is valid.*" What is completion often depends 
upon the terms of the submission. If delivery is to be made, the 
award is not completed until delivery." If delivery is not re- 
quired, its completion is determined by the intention of the arbi- 
trators,*^ and final intention is shown by announcement of oral 
award and publication or notice of written award and in any 
case by delivery.** The authority of arbitrators is also terminated 
by their inability to agree and notification to the parties of such 
fact,** or by the appointment of an umpire upon disagreement, 
and submission of the matters to him.*° Whenever an award is 



''Anderson v. Wallace, 3 CI. & F. 
26, 6 Eng. Reprint 1347 ; Simons v. 
Mills, 80 Cal. 118, 22 Pac. 25; Bangor 
Sav. Bank v. Niagara Fire Ins. Co., 
85 Maine 68, 26 Atl. 991, 20 L. R. A. 
650, 35 Am. St. 341; David Harley 
Co. V. Barnefield, 22 R. I. 267, 47 Atl. 
544; Burchell v. Marsh, 17 How. (U. 
S.) 344, IS L. ed. 96. 

™The mere fact that an award was 
prepared by an attorney for one 
party is not ground to set it aside. In 
re Zuber, 25 Ont. L. R. 252, Ann. 
Cas. 1912C. 1002 and note. Thorp v. 
Cole, 2 C. M. & R. 367, 4 Dowl. 457, 
5 L. J. Exch. 24; In re Traser, 12 
Nova Scotia 10; Rounds v. Aiken 
Mfg. Co., 58 S. Car. 299, 36 S. E. 714; 
Choctaw Nation v. United States, 
119 U. S. 1, 30 L. ed. 306, 7 Sup. Ct. 
75, 22 Ct. CI. 476; Shipman v. Fletch- 
er, 82 Va. 601 ; Dickinson v. Chesa- 
peake & Ohio R. Co., 7 W. Va. 390. 

"In re Stringer (1901), 1 K. B. 
105, 70 L. J. Q. B. 19, 49 Wkly. Rep. 
Ill; Benson v. Love, 1 U. C. Q. B. 
398; Porter v. Scott, 7 Cal. 312; Fitz- 
gerald V. Fitzgerald, Hardin (Ky.) 
227; Martin v. Oneal, 2 Litt. (Ky.) 
54; Flannery v. Sahagian, 134 N. Y. 
85, 31 N. E. 319, 45 N. Y. St. 598. 



"Anderson v. Miller, 108 Ala. 171, 
19 So. 302; Williams v. Rumbough, 

5 Lea (Tenn.) 606. 

*^ Dowse V. Coxa, 3 Bing. 20, 3 L. 
J. C. P. (O. S.) 127, 10 Moore C. 
P. 272, 28 Rev. Rep. 565, 11 E. C. L. 
20; Baby v. Davenport, 2 U. C. Q. B. 
65 ; Fargo v. Reighard, 13 Ind. App. 
39, 39 N. E. 888, 41 N. E. 74; Betsill v. 
Betsill, 30 S. Car. 505, 9 S. E. 652; 
Byars v. Thompson, 12 Leigh (Va.) 
550, 37 Am. Dec. 680. 

"Edmundson v. Wilson, 108 Ala. 
118, 19 So. 367; Maud v. Patterson, 
19 Ind. App. 619, 49 N. E. 974; 
Thompson v. Mitchell, 35 Maine 281 ; 
Doke V. James, 4 N. Y. 568; Butler 
V. Boyles, 10 Humph. (Tenn,) 155, 
51 Am. Dec. 697; Pollard v. Lump- 
kin, 6 Grat. (Va.) 398, 52 Am. Dec. 
128 ; Rogers v. Corrothers, 26 W. Va. 
238; McCord v. Flynn, 11 Wis. 78, 
86 N. W. 668. 

** Couch V. Harrison, 68 Ark. 580, 
60 S. W. 957; Baltes v. Bass Foundry 

6 Machine Works, 129 Ind. 185, 28 N. 
E. 319; Jeffersonville R. Co. v. 
Mounts, 7 Ind. 669. 

"Mitchell v. Harris, 1 Ld. Raym. 
671, 12 Mod. 512; Daniel v. Daniel, 
6 Dana (Ky.) 93; Lyon v. Blossom, 



2952 



'ARBITRATION AND AWARD. 



1 68 



required to be made within a certain time, the authority of the 
arbitrators terminates at the expiration of the fixed time/" Gen- 
erally, the same principle applies when a time limit is fixed by 
statute.*' This time limit may be extended by the parties,*^ or by 
the arbitrators themselves if given authority.** If no time is fixed, 
the time of making award is largely discretionary with the arbi- 
trators,"" but their authority may be revoked when they fail upon 
request to make an award within a reasonable time.^^ Objections 
to an award made after the time limited may be waived." The 
death of an arbitrator previous to the execution of the award 
terminates the authority of the others.**^ After the termination 
of their authority, arbitrators have no further power to make an 
award,°* or add to or correct their former award. ^'^ The cases are 
in conflict as to their power after termination of their authority 



11 N. Y. Super. Ct. 318. Compare 
Gibson V. Broadfoot, 3 Desaus. (S. 
Car.) 584. 

" See cases cited in note 1, § 2962 ; 
Ryan v. Dougherty, 30 Cal. 218 ; Con- 
rad V. Johnson, 20 Ind. 421 ; Fink v. 
Fink, 8 Iowa 312; Burnam v. Bur- 
nam, 6 Bush. (Ky.) 389; St. Martin 
V. Mestaye, 18 La. Ann. 320; Bent v. 
Frie Tel. & T. Co., 144 Mass. 165, 
10 N. E. 778; Elliott v. Hanson, 39 
.Mich. 157; White v. Kemble, 3 N. 
J. L. 461; White v. Puryear, 10 
Yerg. (Tenn.) 441. 

"Field V. Bissell, 36 Maine 593; 
Franklin Mining Co. v. Pratt, 101 
Mass. 359; Atwood v. York, 4 N. H. 
50. Contra, Evans v. Hitchcock, 26 
111, 295; Patrick v. Batten, 123 j\Iich. 
203, 81 N. W. 1081. Statutory time 
requirement may be waived. Conrad 
V. Johnson, 20 Ind. 421. 

"Buntain v. Curtis, 27 111. 374; 
. Shriver v. State, 9 Gill. & J. (Md.) 1 ; 
Brown v. Copp, 5 N. H. 346; Bloomer 
V. Sherman, 2 Edw. (N. Y.) 452, 
afifd. 5 Paige (N. Y.) 575; Bryer's 
Exrs. V. Stewart, 3 N. Car. Ill; Pen- 
man V. Gardner, 1 Brev. (S. Car.) 
498; Bachelder v. Wallace, 1 Wash. 
Terr. 107; Brookins v. Shumway, 18 
Wis. 98. 

"In re Killett &c. Local Board, 34 
L J. Q. B. 87. 71 L. T. (N. S.) 457, 
13 Wkly. R. 207; Dickins v. Tarvis, 5 
B. & C. 528, 8 D. & R. 285, 11 E. C. 
L. 569; Bixby v. Whitney, 11 



(Greenl.) Maine 62. See cases cited 
in note 69, § 2946. 

"Alabama Agr. &c. Assn. v. Trim- 
ble, 49 Ala. 212; Small v. Thurlow, 
2>7 Maine 504; Ruckman v. Ransom, 
35 N. J. L. 565 ; Nichols v. Rensselaer 
County Mut. Ins. Co., 22 V\'end. (N. 
Y.) 125; White v. Puryear, 10 Yerg. 
(Tenn.) 441. 

"'Curtis V. Potts, 3 M. & S, 145; 
Jacobs V. Moffatt, 3 Blackf. (Ind.) 
395 ; Small v. Thurlow, Z1 Maine 504 ; 
Ruckman v. Ransom, 35 N. J. L. 565. 

"'Ellison V. Chapman, 7 Blackf. 
(Ind.) 224; Bryant v. Lew, 52 La. 
Ann. 1649, 28 So. 191; Adams v. Mac- 
farlane, 65 Maine 143 ; Wood v. 
Tunnicliff, 74 N. Y. 38; Mathews v. 
Miller, 25 W. Va. 817. 

'^ Blundell v. Brettargh, 17 Ves. Jr. 
232. But death after execution of 
award before its return to court does 
not make it invalid. Cartledge v. Cut- 
hff, 21 Ga. 1. 

"Maud V. Patterson, 19 Ind. App. 
619, 49 N. E. 974; Lansdale v. Ken- 
dall, 4 Dana (Ky.) 613; Woodbury 
V. Northy, 3 Greenl. (Maine) 85, 14 
Am. Dec. 214; Clark v. Burt, 4 Gush. 
(Mass.) 396; Aldrich v. Jessiman, 8 
N. H. 516; Doke v. James, 4 N. Y 
568; Patton v. Baird, 42 N. Car. 255; 
Bayne v. Morris, 1 Wall. (U. S.) 97, 
17 L. ed. 495. See also. Hackney v. 
Adams, 20 N. Dak. 130, 127 N W 
519. 

"Thompson v. Mitchell, 35 Maine 



169 



ARBITRATION. 



§ 2953 



to correct clerical errors/" Courts have no power to compel ar- 
bitrators to proceed with the making of an award/' but under 
certain circumstances equity may restrain an arbitration proceed- 
ing/^ 

§ 2953. Compensation and liability of arbitrators. — In the 
United States, even though there is no express agreement as to 
pay for their services, arbitrators are entitled to recover for the 
reasonable value of such services.^" In some cases, the amount 
is regulated by statute,"" and it is competent to provide by agree- 
ment what the amount shall be."^ In general, the parties are both 
liable to the arbitrator for his compensation,"^ though it is some- 
times held that the party demanding is primarily liable."" Arbi- 
trators may maintain an action in the nature of assumpsit for 
their fee,"* or may withhold the award until their compensation 
is paid."* Since their action is judicial in its nature, arbitrators 



281; Martin v. White, 1 Ky. L. (ab- 
stract) 347; Shurtleff v. Parker, 138 
Mass. 86: Green v. Lundy, 1 N. J. 
L. 435 ; Herbst v. Hagenaers, 137 N. 
Y. 290, 33 N. E. 31S; Robinson-Rea 
Mfg. Co. V. Mellon, 139 Pa. St. 257, 
21 Atl. 91, 23 Am. St. 186; Rogers 
V, Carrothers, 26 W. Va. 238. See 
McCord V. Flynn, 111 Wis. 78, 86 N. 
W. 668, holding that clerical errors 
may be corrected. 

™ Cases holding that clerical errors 
may not be corrected : Dudley v. 
Thomas, 23 Cal. 365; Mordue v. 
Palmer, L. R. 6 Ch. App. 22, 40 L. J. 
Ch. 8, 23 L. T. (N. S.) 752, 19 Wkly. 
Rep. 86; Irvine v. EInon, 8 East 54; 
Eisenmeyer v. Sauter, 11 111. 515; 
Saunders v. Heaton, 12 Ind. 20 ; Pat- 
ton V. Baird, 42 N. Car, 255 ; Hartley 
V. Henderson, 189 Pa. St. 277, 42 Atl. 
198; Robinson-Rea Mfg. Co. v. Mel- 
lon, 139 Pa. St. 257, 21 Atl. 91, 23 
Am. St. 186 ; Goodell v. Raymond, 27 
Vt. 241 ; Forrer v. Coffman, 23 Grat. 
(Va.) 871. 

"Lewin v. Holbrook, 11 M. & W. 
110, 2 Dowl. (N. S.) 991; Crawshay 
V. Collins, 1 Swanst. 40. 

='Witt V. Corcoran, L. R. 8 Ch. 
App. 476 and note ; Farrar v. Cooper, 
44 Ch. D. 323; Beddow v. Beddow, 
9 Ch. D. 89. 

"Young V. Starkey, 1 Cal. 426; 



Holcomb V. Tiffany, 38 Conn. 271 ; 
Alexander v. Collins, 2 Ind. App. 176, 
28 N. E. 190; Butman v. Abbot, 2 
Greenl. (Maine) 351; Russell v. 
Page, 147 Mass. 282, 17 N. E. 536; 
Goodall V. Cooley, 29 N. H. 48; Hin- 
man v. Hapgood, 1 Denio (N. Y.) 
188, 43 Am. Dec. 663; Harris v. 
Brand, 27 Ohio C. C. 713. See also, 
Kelly V. Lynchburg & D. R. Co., 110 
N. Car. 431, IS S. E. 200, 16 L. R. A. 
514. 

'" James v. Southern Lumber Co., 153 
Mass. 361, 26 N. E. 995 ; Hassinger v. 
Diver, 2 Miles (Pa.) 411. 

"Hoggins V. Gordon, 3 Q. B. 466, 
43 E. C. L. 822; Crampton v. Ridley, 
20 Q. B. D. (Eng.) 48; Poppers v. 
Knight, 69 111. App. 578. 

=' Malo V. Land & Loan Co., 5 Que- 
bec Super. Ct. 483 ; Miller v. Fisk, 47 
Ga. 270; Stevens v. Record, 56 Maine 
488; Davis v. Bradford, 58 N. H. 
476; Harris v. Brand, 27 Ohio C. C. 
713. 

"^Alexander v. Collins, 2 Ind. App. 
176, 28 N. E. 190 ; Butman v. Abbot, 2 
Greenl. (Maine) 361. 

"Holcomb V. Tiffany, 38 Conn. 
271; Russell v. Page, 147 Mass. 282, 
17 N. E. 536; Davis v. Bradford, 53 
N. H. 476; Hinmari v. Hapgood, 1 
Denio (N. Y.) 188. 43 Am. Dec. 663. 

""Young v. Starkey, 1 Cal. 426; 



§ 2954 



'ARBITRATION AND AWARD. 



170 



cannot be held liable in damages to either party because of lack 
of care or want of skill in making an award/^ and are exempt 
from civil Hability, even when they are charged with fraud, cor- 
ruption, or unlawful conspiracy in making the award." In Min- 
nesota an arbitrator who agrees beforehand to render a certain 
award is guilty of a misdemeanor.*' 

§ 2954. Proceedings before arbitrators in general — Pres- 
ence at meetings. — Generally, arbitrators may determine the 

manner in which they conduct their proceedings, unless restricted 
by the submission, and they need not follow technical rules.*' 
It has been held that where arbitration is provided for by rule 
or regulation of a society, and one voluntarily submits to such, 
the award is as valid as if the submission were not made under 
such rule.'" In general, objections to the proceedings of arbi- 
trators must be made at the hearing, or as soon as the party 
learns of the ground therefor, for proceeding after knowledge 
of irregularity is held to waive the irregularity.'^ The rule is 



Butman v. Abbot, 2 Maine 361 ; Rus- 
sell V. Page, 147 Mass. 282, 17 N. 
E. 536; Clement v. Comstock, 2 
]\Iich. 359; Willard v. Bickford, 39 
N. H. 536; New York Lumber & 
Wood- Working Co. v. Schnieder, 119 
N. Y. 475, 24 N. E. 4. 

^ An arbitrator is not the agent of 
the party appointing him. Connecticut 
Fire Ins. Co. v. Cohen, 97 Md 294, 
55 Atl. 675, 99 Am. St. 445; Turner 
V. Goulden, L. R. 9 C. P. 57, 43 L. 
J. C. P. 60; Pappa v. Rose, L. R. 7 
C. P. 32, 41 L. J. C. P. 11, 27 L. T. 
(N. S.) 348, 20 Wkly. Rep. 62, L. 
R. 7 C. P. 525, 41 L. J. C. P. 187, 20 
Wkly. R. 784; Phelps v. Dolan, 75 
III 90. 

" Jones V. Brown, 54 Iowa 74, 6 N. 
W. 140, 37 Am. Rep. 185; Hutchins 
V. Merrill (Maine), 84 Atl. 412; 
Hoosac Tunnel, Dock &c. Co. v. 
O'Brien, 137 Mass. 424, 50 Am. Rep. 
323. See Sever v. Brown, 56 Iowa 565, 
9 N. W. 911, 41 Am. Rep. 118, hold- 
ing that acts rendering an award un- 
availing may defeat an arbitrator's 
right to compensation. 

»» Earle v. Johnson, 81 Minn. 472, 84 
N. W. 332. 

""Hall v. Norwalk F. Ins. Co., 57 



Conn. 105, 17 Atl. 356; Skrable v. 
Pryne, 93 Iowa 691, 62 N. W. 21; 
Sanborn v. Paul, 60 Maine 325 ; Blod- 
gett V. Prince, 109 Mass. 44; Hewitt 
V. Reed City, 124 Mich. 6, 82 N. W. 
616, 50 L. R. A. 128, 83 Am. St. 309 ; 
Turnbull v. Martin, 2 Daly (N. Y.) 
428, 37 How. Prac. (N. Y.) 20; Rob- 
inson V. Bickley, 30 Pa. St. 384; As- 
kew V. Kennedy, 1 Bailey (S. Car.) 
46. 

™ Payne v. Crawford, 97 Ala. 604, 
10 So. 911, 11 So. 725; Robinson v. 
Templar Lodge No. 17, I. O. O. F., 97 
Cal. 62, 31 Pac. 609, 59 Am. St. 193 ; 
Sonneborn v. Lavarello, 2 Hun (N. 
Y.) 201; Green v. Carpenter, 12 
Wkly. N. Cas. (Pa.) 201; Vaughn v. 
Herndon, 91 Tenn. 64, 17 S. W. 793. 
Compare Grimbley v. Harrold, 125 
Cal. 24, 57 Pac. 558, 73 Am. St. 19. 
See Pacaud v. Waite, 218 111. 138, 
75 N. E. 779, 2 L. R. A. (N. S.) 672 
and note. 

"Payne v. Crawford, 97 Ala. 604, 
10 So. 911, 11 So. 725 ; Blood V. Shine, 
2 Fla. 127; Harper v. Pike County 
Roads Commrs.. 52 Ga. 659; Brvant 
V. L'evv, 52 La. Ann. 1649, 28 So. 191 ; 
Small V. Trickey. 41 Maine 507, 65 
Am. Dec. 255; Everett v. Charles- 



171 



ARBITRATION. 



§ 2954 



that all arbitrators, if there are more than one, must be present 
at every meeting at which judicial action is taken, in order that 
the parties may have the benefit of the experience and judgment 
of each arbitrator throughout all of the proceedings so that a 
just conclusion may be reached.''^ This rule applies especially to 
meetings at v^^hich evidence is to be heard,'* and also to meet- 
ings after the hearing of the evidence for consultation as to the 
award.'* Even where a majority may make an award, they can- 
not do so without consulting the others.'^ It has even been held 
that each arbitrator must sign the award in the presence of all 
the others,'" but there are cases to the contrary." If one arbi- 
trator refuses to act in the first place, or withdraws before an 
agreement is reached, no valid award can be made.'^ If, how- 
ever, some arbitrators withdraw after all evidence is heard, and 
consultation is begun, an award by a majority is usually held 



town, 12 Allen (Mass.) 93; O'Neill 
V. Clark, 57 Nebr. 760, 78 N. W. 256; 
Sonneborn v. Lavarello, 2 Hun (N. 
Y.) 201; Thomas v. Heger, 174 Pa. 
St. 345, 34 Atl. 568; Hart v. Kennedy, 
47 N. J. Eq. 51, 20 Atl. 29. See cases 
cited in note 20, § 2979. 

"^ Elliott Evidence, § 1660 ; McCrary 
V. Harrison, 36 Ala. 577; Leavitt v. 
Windsor, Land &c. Co., 54 Fed. 439, 
4 C. C. A. 425; Taylor v. Vessel 
Owners' Towing Co., 25 111. App. 
503, affd. 126 111. 250, 18 N. E. 663; 
Heritage v. State, 43 Ind. App. 595, 
88 N. E. 114; Kent v. French, . 76 
Iowa 187, 40 N. W. 713; Blanton v. 
Gale, 6 B. Mon. (Ky.) 260; Haven 
V. Winnisimmet Co., 11 Allen (Mass.) 
377, 87 Am. Dec. 723; Harvin v. 
Denton, 87 Miss. 238, 39 So. 456; 
Dunphy V. Ford, 2 Mont. 300 ; Moore 
V. Ewing, 1 N. J. L. 144, 1 Am. Dec. 
195; Mclnroy v. Benedict, 11 Johns. 
(N. Y.) 402; Bartolett v. Dixon, 73 
Pa. St. 129; Blin v. Hay, 2 Tyler 
(Vt) 304, 4 Am. Dec. 738. 

"Taylor v. Vessel Owners' &c. Co., 
25 111. App. 503, affd. 126 111. 250, 18 
N. E. 663; Baker v. Farmbrough, 43 
Ind. 240 ; Short v. Pratt, 6 Mass. 496 ; 
Shores v. Bowen, 44 Mo. 396; Bul- 
son V. Lohnes, 29 N. Y. 291 ; Wood 
V. Helme, 14 R. I. 325. 

" Henderson v. Buckley, 14 B. Mon. 



(Ky.) 292; Cumberland v. North 
Yarmouth, 4 Greenl. (Maine) 459; 
Haven v. Winnisimmet Co., 11 Allen 
(Mass.) 377, 87 Am. Dec. 723; Moore 
v. Ewing, 1 N. J. L. 144, 1 Am. Dec. 
195. 

" McCrary v. Harrison, 36 Ala. 577; 
Jeffersonville R. Co. v. Mounts, 7 
Ind. 669; Doherty v. Doherty, 148 
Mass. 367, 19 N. E. 352, 12 Am. St. 
560; Haven v. Winnisimmet Co., 11 
Allen (Mass.) 377, 87 Am. Dec. 723 ; 
Sperry v. Ricker, 4 Allen (Mass.) 
19; Witz v. Tregallas, 82 Md. 351, 
33 Atl. 718; Battey v. Button, 13 
Johns. (N. Y.) 187; King v. Grey, 31 
Tex. 22; Doyle v. Patterson, 84 Va. 
800, 6 S. E. 138. Elliott Evidence, 
§ 1660. 

" Stalworth v. Inns, 13 M. & W. 466, 
2 Dowl. & L. 428; Daniels v. Ripley, 
10 Mich. 237; French v. Butler, 39 
Mich. 79; Mississippi Cotton-Oil Co. 
v. Buster, 84 Miss. 91, 36 So. 146; 
Moore v. Ewing, 1 N. J. L. 144, 1 
Am. Dec. 195. 

"Steeve v. Brownell, 113 111. 415; 
Campbell v. Upton, 113 Mass. 67. 

" Elberton Hardware Co. v. Hawes, 
122 Ga. 858, 50 S. E. 964; Gary v. 
Bailey, 55 Iowa 60, 7 N. W. 410 ; Hoff 
v. Taylor, 5 N. J. L. 829. Compare 
Niagara Fire Ins. Co. v. Boon, 76 
Ark. 153, 88 S. W, 915. 



§ 2955 ARBITRATION AND AWARD. 1 72 

valid." Under a submission to three arbitrators containing an 
ita quod clause "so as they or any two of them" may make an 
award, it is held that the number required to make the award may 
hold hearings and make a valid award, if notice was given to the 
arbitrator not attending.^" The parties may waive the attend- 
ance of all arbitrators at meetings," and it is held a waiver where 
a party without objection participates in a hearing before less 
than all.^^ A recital in the award sufficiently shows that all arbi- 
trators were present at hearings, even though all did not sign.*** 
The award need not show on its face that all the arbitrators were 
present at the meetings, for this may be proved by other evi- 
dence,** and it is held that in the absence of a showing to the 
contrary, attendance is presumed.*" 

§ 2955. Right to hearing before arbitrators — Extent of 
right. — A hearing of the parties by the arbitrators is not es- 
sential where it is manifest from the submission that it was in- 
tended that the arbitrators should act upon their own information 
and judgment.*^ In general, where evidence is to be taken, both 
parties are entitled to a hearing before the arbitrators," and upon 

" See cases cited under note 75, Bachelder v. Wallace, 1 Wash. Ter. 

§ 29S4. 107 ; Rixf ord v. Nve, 20 Vt, 132. 

'"Dalling v. Match«;tt, Willes 215; ^^ Robinson v. Bicklev, 30 Pa. St. 

Hoff V. Taylor, 5 N. j. L. 829; Cro- 384; Bartolett v. Dixon, 73 Pa. St. 

foot V. Allen, 2 Wend. (N. Y.) 494; 129. 

Bulson V. Lohnes, 29 N. Y. 291 ; Blin «> Hall v. Norwalk Fire Ins. Co., 57 

V. Hay, 2 Tyler (Vt.) 304, 4 Am. Conn. 105, 17 Atl. 356; Bridgeport v. 

Dec. 738. Eisfenman, 47 Conn. 34 ; James v. 

''Phipps V. Tompkins, 50 Ga. 641; Schroeder, 61 Mich. 28, 27 N. W. 

Lattimore v. Martin, Add. (Pa.) 11; 850; Box v. Castello, 6 Misc. (N. Y.) 

Howard v. Conro, 2 Vt. 492. 415, 27 N. Y. S. 293; Day v. Ham- 

»' Badders v. Davis, 88 Ala. iSl , 6 mond. 57 N. Y. 479, IS Am. Rep. 522 ; 
So. 834; Glass-Pendery Consol. Min. Rector v. Hunter, 15 Tex. 380; Can- 
Co. V. Meyer Min. Co., 7 Colo. 51, 1 field v. Watertown Fire Ins. Co., 55 
Pac. 443 ; Akridge v. Pattillo, 44 Ga. Wis. 419, 13 N. W. 252. 
585; White v. Robinson, 60 111. 499; "Curtis v. Sacramento, 64 Cal. 102, 
Heritatje v. State, 43 Ind. App. 595, 28 Pac. 108; Warren v. Tinsley, 53 
88 N. E. 114: Sweeney v. Vaudry, 2 Fed. 689, 3 C. C. A. 613; Citizens' 
Mo. App. 352. Ins. Co. v. Hamilton, 48 111. App. 

"' Thompson v. Mitchell, 35 Maine 593 ; Dormov v. Knower, 55 Iowa 722, 

281; Sperry v. Ricker, 4 Allen 8 N. W. 670; Penny v. Carl, 10 La. 

(Mass.) 17. Ann. 202; Wilson v. Boor, 40 Md. 

"Buxton V. Howard, 38 Ind. 109; 483; Billings v. Billings, 110 Mass. 

Door V. Hill, 62 N. H. 506; Rogers 225; Janney v. Goehringer, 52 Minn. 

V. Tatum, 25 N. J. L. 281 ; Schultz v. 428, 54 N. W. 481 ; Hart v. Kennedy 

Halsey, 5 N. Y. Super. Ct. 405; Ack- 47 N. J. Eq. 51, 20 Atl. 29; IMora'n 

lev V. Finch, 7 Cow. (N. Y.) 290; v. Bogert, 3 Hun (N. Y.) 603, 16 



173 



ARBITRATION. 



§ 2956 



all matters submitted.^* By an express agreement in clear words 
this right may be waived.^" Even if the arbitrators have acted in 
good faith in denying a hearing, it is immaterial."" But it is held 
that they are not under a duty to hear counsel or argument."^ 
So w^here there is a right to a hearing, the arbitrators must not 
refuse to hear competent evidence."^ But since they are not 
held to the technical rules of law, the fact that they heard evi- 
dence irrelevant or incompetent at law, will not affect the award.°^ 

§ 2956. Time and place of hearing before arbitrators. — The 

arbitrators have general power to fix the time and place of hear- 
ing, and if this power is exercised reasonably, the failure of prop- 
erly notified parties to attend hearings is at their peril."* Where 
the submission provides for meeting at a fixed time and place, 
the arbitrators must do so.°° The authority of arbitrators is not 



Abb. Pr. (N. S.) 303; Shinnie v. Coil, 
1 McCord Eq. (S. Car.) 478; Ship- 
man V. Fletcher, 82 Va. 601. See Meloy 
V. Imperial Land Co. (Cal.), 124 Pac. 
712. 

''Richelieu &c. Nav. Co. v. Com- 
mercial Union Assur. Co., 3 Quebec 
Q. B. 410. 

"»Amos V. Buck, 75 Iowa 651, Z1 
N. W! 118; Hart v. Kennedy, 47 N. 
J. Eq. 51, 20 Atl. 29; In re Martin, 
1 How. Pr. (N. S.) (N. Y.) 28. See 
Hewitt V. Reed City, 124 Mich. 6, 
82 N. W. 616, SO L. R. A. 128, 83 
Am. St. 309. 

°°Sharpe v. Bickerdyke, 3 Dow 
102; Elmendorf v. Harris, 23 Wend. 
(N. Y.) 628, 35 Am. Dec. 587. 

"^In re Macqueen, 9 C. B. (N. S.) 
793 99 E. C. L. 793 ; Gardner v. New- 
man, 135 Ala. 522, ZZ So. 179 ; Penn- 
sylvania Iron Works Co. v. East St. 
Louis Ice &c. Co., 96 Mo. App. 563, 
70 S. W. 903; Zell v. Johnston, 76 
N. Car. 302. 

"■ Milner v. Noel, 43 Ind. 324 ; Drey- 
fous -v. Hart, 36 La. Ann. 929; 
Roberts v. Consumers' Can Co., 102 
Md. 362, 62 Atl, 585, 111 Am. St. Zll ; 
Mosness v. German-American Ins. 
Co., 50 Minn. 341, 52 N. W. 932; 
Newman v. Labeaume, 9 Mo. 30; 
Burroughs v. Thorne, 5 N. J. L. Ill; 
Halstead v. Seaman, 82 N, Y. 27, 37 
Am. Rep. 536; Caldwell v. Brooks El- 
evator Co., 10 N. Dak. 575, 88 N. W. 



700 ; Hurdle v. Stallings, 109 N. Car. 
6, 13 S. E. 720; Stemmer v. Scottish 
Ins. Co., ii Ore. 65, 49 Pac. 588, 53 
Pac. 498; Cohn v. Wemme, 47 Ore. 
146, 81 Pac. 981, 8 Am. & Eng. Ann. 
Cas. 508; Ligon v. Ford, 5 Munf. 
(Va.) 10; McDonald v. Lewis, 18 
Wash. 300, 51 Pac. 387; Fluharty v. 
Beatty, 22 W. Va. 698; Canfield v. 
Watertown Fire Ins. Co., 55 Wis. 419, 
13 N. W. 252. 

"^ See cases cited in note 98, § 2979 ; 
Lloyd v. Archbawle, 2 Taunt. 324, 
11 Rev. Rep. 595; Lumbard v. Holdi- 
mar, 115 111. App. 458; Harding 
V. Wallace, 8 B. Mon. (Ky.) 536; 
Patten v. Hunnewell, 8 Greenl. 
(Maine) 19; Maynard v. Frederick, 
7 Cush. (Mass.) 247; Vaughn v. 
Graham, 11 Mo. 575; Johnson v. 
Noble, 13 N. H. 286, 38 Am. Dec. 
485; Asken v. Kennedy, 1 Bailey (S. 
Car.) 46; Bassett's Admr. v. Cun- 
ningham's Admr., 9 Grat. (Va,) 684. 
See Fennimore v. Childs, 6 N. J. L. 
386. 

"Edmundson v. Wilson, 108 Ala. 
118, 19 So. 367; Bray v. English, 1 
Conn. 498 ; Penny v. Carl, 10 La. Ann. 
202; Nutter v. Taylor, 78 Maine 424. 
6 Atl. 835; Blodgett v. Prince, 109 
Mass. 44; Ruckman v. Ransom, 35 
N. J. L. 565; Weir v. Johnston, 2 
Serg. & R. (Pa.) 459. 

"^Cole v. Blunt, 15 N. Y. Super. 
Ct. 116; Strum v. Cunningham, 3 



2957 



'ARBITRATION AND AWARD. 



174 



confined to any territorial jurisdiction, as a state or county."" 
The arbitrators must give the parties a reasonable time to secure 
evidence and prepare a case."^ Adjournment of meetings from 
time to time as they shall deem necessary is within the power"' 
and discretion"" of arbitrators. In some cases, as where a party 
is surprised by evidence, or where one party appears with coun- 
sel without notice to the other, the party aggrieved may demand 
an adjournment as of right.^ The submission may limit the time 
within which hearings must be had, and if so, the arbitrators may 
not adjourn hearings to a date beyond the time fixed.^ 

§ 2957. Notice to parties of meetings of arbitrators. — As 
each party has a right to a hearing of his side and to be present 
when the other side is heard, it is generally essential that the 
arbitrators give reasonable notice to the parties of the meetings 



at which evidence is heard and investigation made.^ 



So gener- 



Ohio 286; Weir v. Johnston, 2 Serg. 
& R. (Pa.) 4S9. 

""Edmundson v. Wilson, 108 Ala. 
118, 19 So. 367; McMillan & Allen, 
98 Ga. 405, 25 S. E. 505. 

"Peterson v. Ayre, 15 C. B. 724, 
80 E. C. L. 724, 23 L. J. C. P. (N. 
S.) 129; Morewood v. Jewett, 2 Robt. 
(N. Y.) 496; Green v. Franklin, 1 
Tex. 497; Passmore v. Pettit, 4 Dall. 
(U. S.) 271, 1 L. ed. 830. 

"'Bray v. English, 1 Conn. 498; 
Vinton v. Lindsey, 68 Ga. 291 ; Stee- 
lev V. Irvine, 6 Serg. & R. (Pa.) 128; 
Stiles V. Carlisle, 10 Serg. & R. (Pa.) 
286; Torrance v. Amsden, 3 McLean 
(U. S.) 509, Fed. Cas. No. 14103; 
Boring V. Boring, 2 W. Va. 297. 

°° Vinton V. Lindsey, 68 Ga. 291; 
Madison Ins. Co. v. Griffin, 3 Ind. 
277; Sonneborn v. Lavarello, 2 Hun 
(N. Y.) 201; McDermott v. United 
States Ins. Co., 3 S. & R. (Pa.) 604. 

^ Solomon v. Solomon. 28 L. J. 
Exch. 129; Whatley v. Morland, 2 
Dowl. 249; Coryell v. Coryell, 1 N. 
J. L. 385; In re Picker, 130 App. 
Div. (N. Y.) 88, 114 N. Y, S. 289; 
Torrance v. Amsden, 3 McLean (U. 
S.) 509, 24 Fed. Cas. 14103. 

'Cole V. Blunt, 15 N. Y. Super. Ct. 
116. 

'Gladwin v, Chilcote, 9 Dowl. P. 
C. 550, 5 Jur. 749; Tuskaloosa Bridge 



Co. V. Jemison, 33 Ala. 476; McFar- 
land V. Mathis, 10 Ark. 560; Curtis 
V. Sacramento, 64 Cal. 102, 28 Pac. 
108; Meredith v. Sanborn, 5 Har. 
(Del.) 249; Warren v. Tinsley, 53 
Fed. 689, 3 C. C. A. 613; Walker v. 
Walker, 28 Ga. 140; McDonald v. 
Bond, 96 111. App. 116, affd. 195 111. 
122, 62 N. E. 881; Shivelv v. Knob- 
lock, 8 Ind. App. 433, 35 N. E. 1028; 
Conger v. Dean, 3 Iowa 463, 66 Am. 
Dec. 93 ; Cravens v. Estes, 144 Ky. 
511, 139 S. W. 761; Hickey v. 
Grooms, 4 J. J. Marsh (Ky.) 124; 
Dreyfous v. Hart, 36 La. Ann. 929; 
McKinney v. Page, 32 Maine 513; 
Emery v. Owings, 7 Gill. (j\Id.) 488, 
48 Am. Dec. 580 ; Hills v. Home Ins. 
Co., 129 Mass. 345 ; Janney v. Goeh- 
ringer, 52 Minn. 428, 54 N. W. 481; 
Hook v. Philbrick, 23 N. H. 288: 
Day V. Hammond, 57 N. Y. 479, 15 
Am. Rep. 522; Elmendorf v. Harris, 
23 Wend. (N. Y.) 628, 35 Am. Dec. 
587; Grimes v. Brown, 113 X, Car. 
154, 18 S. E. 87 ; Slater v. La Grande 
Light & Power Co., 43 Ore. 131, 11 
Pac. 738; Share v. Becker, 8 Serg. 
& R. (Pa.) 239; Wood v. Helme. f4 
R. I. 325; Shinnie v. Coil, 1 McCord 
Eq. (S. Car.) 478; Green v. Franklin, 
1 Tex. 497 ; McCormick v. Blackford, 
4 Grat. (Va.) 133; Dickinson v. 
Chesapeake & O. R. Co., 7 W. Va. 



175 



ARBITRATION. 



§ 2957 



ally, a party is entitled to notice of subsequent meetings other 
than regularly adjourned meetings.^ No notice is required if 
the time and place of meeting is named in the submission/ 
Formal notice is required, and mere casually acquired informa- 
tion is not sufficient," but it is sufficient if the time and place were 
fixed in the hearing of the parties,' or if the attorneys of the 
parties are the arbitrators.' Parties are not entitled to notice 
of a meeting for consultation over the award," or to sign the 
award.^" Notice should be given by the arbitrators,^^ but notice 
by one party to the other is sufficient. ^^ Generally, notice should be 
given to the parties themselves.^^ Notice to an attorney has, how- 
ever, been held sufficient.^* The reasonable notice required is such 
as to give the party reasonable opportunity to appear and present 
his case.^° The necessity of notice may be waived,^" and is waived 
by appearing and participating in the proceedings without objec- 
tion.^' It need not be set out in the award that notice was given 



390; Slocum v. Damon, 1 Pin. (Wis.) 
S20. 

''Walker v. Frobisher, 6 Ves. Jr. 
70; Goldsraitli v. Tilly, 1 Har. & J. 
(Md.) 361; Frey v. Vanlear, 1 Serg. 
& R. (Pa.) 435; Eckert v. Sheets, 
6 Serg. & R. (Pa.) 27S; Wood v. 
Helme, 14 R. I. 325; Boring v. Bor- 
ing, 2 W. Va. 297. 

' Maryland &c. R. Co. v. Porter, 19 
Md. 458; Shibe v. Rex, 1 Browne 
(Pa.) 174. 

° Vessel Owners' Towing Co. v. 
Taylor, 126 111. 250, 18 N. E. 663; 
Donnell v. Lee, 58 Mo. App. 288. See 
Shively v. Knoblock, 8 Ind. App. 433, 
35 N. E. 1028. 

'Box V. Costello, 6 Misc. (N. Y.) 
415, 27 N. Y. S. 293. 

'Hill V. Hill, 11 Sm. & M. (Miss.) 
616. See Shibe v. Rex, 1 Browne. 
(Pa.) 174. 

"Roloson V. Carson, 8 Md. 208; 
Zell V. Johnston, 76 N. Car. 302; 
Ormsby v. Bakewell, 7 Ohio 98 ; Mil- 
ler V. Kennedy, 3 Rand. (Va.) 2. 

"Roloson V. Carson, 8 Md. 208. 

"Vessel Owners' Towing Co. v. 
Taylor, 126 111. 250, 18 N. E. 663; 
Crowell V. Davis, 12 Mete. (Mass.) 
293. 

"^ Hoag V. McGinnis, 22 Wend. (N. 
Y.) 163. 



"Hottenstine v. Auten, 43 Pa. St. 
323. Sureties are not entitled to no- 
tice, Farmer v. Stewart, 2 N. H. 97 ; 
Binsse v. Wood, 47 Barb. (N. Y.) 
624, affd. Zl N. Y. 526. 

"Cazier v. Blackstock, 1 Har. 
(Del.) 362. Contra, Rivers v. Walk- 
er, 1 Dall. (U. S.) 81, 1 L. ed. 46. 

"'Walker v. Walker, 28 Ga. 140; 
Conrad v. Massasoit Ins. Co., 4 Al- 
len (Mass.) 20; Elmendorf v. Harris, 
23 Wend. (N. Y.) 628, 35 Am. Dec. 
587; Slater v. La Grande Light 
& Power Co., 43 Ore. 131, 72 Pac. 
738; Emerson v. Udall, 8 Vt. 357. 

"°Duvall V. Sulzner, 155 'Fed. 910; 
Hubbard v. Hubbard, 61 111. 228; 
Spencer v. Curtis, 57 Ind. 221 ; Shively 
V. Knoblock, 8 Ind. App. 433, 35 N. E. 
1028; Whitlock v. Redford, 82 Ky. 
390; Vincent v. German Ins. Co., 120 
Iowa 272, 94 N. W. 458; Graham v. 
Graham, 9 Pa. St. 254; 49 Am, Dec. 
557; Shibe v. Rex, 1 Browne (Pa.) 
174; Pike v. Stallings, 71 Ga. 860; 
Madison Ins. Co. v. GrifBn, 3 Ind. 
277; Harding v. Wallace, 8 B. Mon. 
Ky. 536; Mississippi Cotton-Oil Co. 
V. Buster, 84 Miss. 91, 36 So. 146; 
Van Kirk v. McKee, 9 Pa. St. 100; 
Kane v. Fond du Lac, 40 Wis. 495. 

" Tennessee Coal, I. & R. Co. v. 
Roussell, 155 Ala. 435, 46 So. 866, 130 
Am. St. 56. 



2958 



ARBITRATION AND AWARD. 



176 



the parties for that is presumed unless the contrary is shown.^^ 
But if no notice was given, there is no presumption of waiver/" 
If notified parties refused to attend, the arbitrators may proceed 
ex parte in their absence,^" and may proceed similarly if a notified 
party voluntarily withdraws.'^ In some cases, it is held that lack 
of notice makes a defense to an award in a legal action.^^ In 
others, it is held that this question must be presented by a bill in 
equity."^ 

§ 2958. Conduct of hearing by arbitrators — Witnesses and 

evidence. — Arbitrators have general discretion as to the man- 
ner of conducting a hearing,^* but as a rule should follow ju- 
dicial principles of conduct of other inquiry."" They should in- 
form the parties when the case is closed,^" and after both parties 
have rested, it is discretionary with the arbitrators whether they 
will open it again.-' At common law, without the aid of statute, 
arbitrators may not compel the attendance of witnesses, or the 
production of books and documents,^* and it is not necessarj' to 
swear witnesses, nor have they the power to administer oaths to 



"Crook V. Chambers, 40 Ala. 239; 
Keans v. Rankin, 2 Bibb (Ky.) 88; 
Rigden v. Martin, 6 Harr. & J. (Md.) 
403 ; Upshaw v. Hargrove, 6 Sm. & 
M. (Miss.) 286; New York v. But- 
ler, 1 Barb, (N. Y.) 325, affd. 4 How. 
Pr. (N. Y) 466; Hassenpflug v. Rice, 
90 Ohio Dec. (Reprint) 206, U Cine. 
L. Bui. 200; Lutz v. Linthicum, 8 
Pet. (U. S.) 165, 8 L. ed. 904; Mil- 
ler V. Kennedy, 3 Rand. (Va.) 2; 
Slocum V. Dawson, 1 Pin. (Wis.) 
520. Contra, Reeves v. Eldridg, 20 
111. 384. 

" Warren v. Tinsley, S3 Fed. 689, 3 
C. C. A. 613; Jackson v. Roane, 90 
Ga. 669, 16 S. E. 650. 35 Am. St. 
238; Taylor v. Vessel Owners' Tow- 
ing Co, 25 111. App. 503, affd. in 126 
111. 250, 18 N. E. 663; Thomas v. 
West Jersey R. Co., 24 N. J. Eq. 567; 
Brown V. Lyddy, 11 Hun (N. Y.) 451. 

"" Couch V. Harrison, 68 Ark. 580, 
60 S. W. 957; Whitlock v. Ledford, 
82 Kv. 390, 6 Ky. L. 387 ; Flanders v. 
Chamberlain, 24 i\Iich. 305; Mitchell 
V. Curran, 1 Mo. App. 453; Boring 
V. Borine-, 2 W. Va. 297. 

=■ Cakhvell V. Caldwell, 121 Ala. 598, 
25 So. 825. 



'' Curtis V. Sacramento, 64 Cal. 102, 
28 Pac. 108; Ingraham v. Whitmore, 
75 111. 24; Shively v. Knoblock, 8 Ind. 
App. 433, 35 N. E. 1028; Peters v. 
Newkirk, 6 Cow. (N. Y.) 103; Slater 
V. La Grande Light & Power Co., 43 
Ore. 131, 72 Pac. 738. 

^'Burroughs v. David, 7 Iowa 154; 
.Miller v. Kennedy, 3 Rand. (Va.) 2. 

^'Tillam V. Copp, 5 C. B. 211, 57 
E. C. L. 211; Carlston v. St. Paul F. 
& M. Ins. Co., 37 Mont. 118, 94 Pac, 
756, 127 Am. St. 715. 

"^Hart V. Kennedy, 47 N. J. Eq. 
51, 20 Atl. 29. 

'° Pepper v. Gorham, 4 Moo. C. P. 
148, 16 E. C. L. 365; Grazebsook v. 
Davis, 5 B. & C. 535, 11 E. C. L. 
534. 

'''Ringer v. Joyce, 1 Marsh. C. P. 
404. 4 E. C. L. 469 ; Bignall v. Gale, 2 
M. & G. 830, 40 E. C. L. 643 ; Blodgett 
V. Prince, 109 Mass. 44; Sv>reeney v. 
Vaudry, 2 Mo. App. 352; Cleaveland 
V. Plunter, 1 Wend. (N. Y.) 104; 
Tennant v. Divine, 24 W. Va. 387. 

=' Bryant v. Lew, 52 La. Ann. 1649, 
2S So. 191 ; Tobev v. Bristol County, 
3 Story (U. S.) 800; Fed. Cas. 14065; 



177 



ARBITRATION. 



2958 



witnesses.^* Statute may provide for the swearing of witnesses 
and in such case, the failure to administer an oath to the wit- 
nesses will invalidate the award/" unless waived/^ and a failure 
to object to the testimony of one not properly sworn is held a 
waiver.^^ The presumption in the absence of contrary showing 
is that the witnesses were sworn/^ Arbitrators have a right to al- 
low the amendment of pleadings before them.^* Parties have a 
right to be present at the hearing of evidence and examination of 
witnesses and an arbitrator has not the right to listen to evidence 
of one party or to hear matters ex parte, behind the other's 
back."'' An award is not binding, where after hearing both 
parties, further evidence on behalf of one is heard in the absence 
of the other.^" It has been held that arbitrators may not call 



^'Thornton v. McCormick, 75 Iowa 
285, 39 N. W. 502; Bryant v. Levy, 
52 La. Ann. 1649, 28 So. 191 ; Sanborn 
V. Paul, 60 Maine 325 ; State v. Jack- 
son, 36 Ohio St. 281 ; Rounds v. 
Aiken Mfg. Co., 58 S. Car. 299, 30 
S. E. 714; Tobey v. Bristol County, 
3 Story (U. S.) 800, Fed Cas. 14065; 
Kane v. Fond du Lac. 40 Wis. 495. 

=° Wolfe V. Hyatt, 76 Mo. 156; 
Wells V. Collier, 1 N. Y. Leg. Obs. 
189 ; In re Grening, 56 N. Y. St. 196, 
74 Hun (N. Y.) 62, 26 N. Y. S. 117. 

"■ Russell V. Seery, 52 Kans. 736, 35 
Pac. 812; Cochran v. Bartle, 91 Mo. 
636, 3 S. W. 854; Grafton Quarry 
Co. V. McCully, 7 Mo. App. 580; 
Pierce v. Perkins, 17 N. Car.' 250. 

"Gandy v. Tippett, 155 Ala. 296, 
46 So. 463; In re Conner, 128 Cal. 
279, 60 Pac. 862; Greer v. Canfield, 38 
Nebr, 169, 56 N. W. 883; McGregor 
V. Spratt, 59 Hun (N. Y.) 617, 35 N. 
Y. St. 907, 13 N. Y. S. 191 ; Large v. 
Passmore, 5 Serg. & R. (Pa.) 51; 
Newcomb v. Wood, 97 U. S. 581, 
24 L. ed. 1085. See also. Hackney 
V. Adam, 20 N. Dak. 130, 127 N. W. 
519. 

^Hannan v. Jube, 10 Jur. 926; 
Tomlinson v. Hammond, 8 Iowa 40 ; 
Weir V. West, 27 Kans. 650: Reeves 
V. McGlochlin, 65 Mo. App. 537. 

** In re Crighton &c. General Ins. 
Corp. (1910), 2 K. B. 738, 20 Am. 
& Eng. Ann. Cas. 600 and note; 
Lloyd V. Sturgeon Falls Pulp Co., 
85 L. T. (N. S.) 162. 

12 — CoNTEACTS, Vol. 4 



""McFarland v. Mathis, 10 Ark. 
560; Alexander v. Cunningham, 111 
111. 511; Moshier v. Shear, 102 111. 
169, 40 Am. Rep. 573; Allen v. Hill- 
er, 8 Ind. 310; Sullivan v. Frink, 3 
Iowa 66 ; Sims v. Banta, 9 Ky. L. 
(abstract) 286; Small v. Trickey, 
41 Maine 507, 66 Am. Dec. 255 ; Fu- 
dickar v. Guardian Mut. Life Ins. 
Co., 62 N. Y. 392; Western Female 
Seminary v. Blair, 1 Disn. (Ohio) 
370, 12 Ohio Dec. 677. See also, 
Hewitt V. Reed City, 124 Mich. 67, 
82 N. W. 616, 50 L. R. A. 128, 83 Am. 
St. 309. 

" Hartford Fire Ins. Co. v. Bon- 
ner Mercantile Co., 44 Fed. 151, 11 L. 
R. A. 623, affd. 56 Fed. 278, 5 C. C. 
A. 524; Hewitt v. Reed City, 124 
Mich. 6, 82 N. W. 616, 50 L. R. A. 
128; Hollingsworth v. Leeper, 1 Dall. 
(Pa.) 161, 1 L. ed. 82; Shinnie v. 
Coil, 1 McCord Eq. (S. Car.) 478; 
Shipman v. Fletcher, 82 Va. 601; 
Lutz V. Linthicum, 8 Pet. (U. S.) 
165, 8 L. ed. 904; Rosenau v. Legg, 
82 Ala. 568, 2 So. 441; Jackson v. 
Roane, 90 Ga. 669, 16 S. E. 650, 35 
Am. St. 238; Sisk v. Garey, 27 Md. 
401; Rand v. Peel, 74 Miss. 305, 21 
So. 10 ; Bassett v. Harkness, 9 N. H. 
164; National Bank of Republic v. 
Darragh, 30 Hun (N. Y.) 29, affd. 
93 N. Y. 655; Cleland v. Hedly, 5 R. 
I. 163. A party may be called upon 
in the absence of the other in cer- 
tain matters which will not prejudice 
the opposite party, as where the pur- 



§ 2958 ARBITRATION AND AWARD. 1 78 

witnesses on their own initiative." In certain cases, the sub- 
mission, as where made to persons of special skill or knowledge, 
may justify personal investigation by the arbitrators and even 
failure to make outside investigation.^* It has been said that 
arbitrators are not held to strict rules of evidence and an award 
is not invalid for the admission of evidence incompetent at law,^** 
but they must not refuse to hear competent evidence.^" The pre- 
sumption is that all proper evidence was heard.*^ Arbitrators 
may hear expert evidence,*^ and may sometimes as experts, act 
on their own knowledge,*^ or use their own personal knowledge 
of the matters in controversy.** The improper exclusion of evi- 
dence does not make an award void at law, but is ground for 
equitable attack.*'' Though arbitrators may reopen a case for fur- 
ther testimony, the rule is that the exercise of this power is dis- 
cretionary and after the parties have rested for a long time, and 
then seek to introduce new evidence, it is proper to refuse to hear 
them.*^ But if the hearing is not closed nor the parties given 
time to produce evidence or were left with the impression 
that other meetings would be held, the arbitrators have not the 
right to make an award without further hearing.*^ 

pose is to clear up an uncertainty, v. Eau Claire Water Co., 137 Wis. 

Seaton v. Kendall, 171 111. 410, 49 N. 517, 119 N. W. 555. 

E. 561; Stewart v. Waldron, 41 "Duvall v. Sulzner, 155 Fed. 910; 

Maine 486; Witz v. Tregallas, 82 Md. Matter of Bennett, 55 Hun (N. Y.) 

351, 33 Atl. 718; Neely v. Buford, 65 611, 30 N, Y. St. 166, 9 X. Y. S. 915. 

Mo. 448; Herrick v. Blair, 1 Johns. "Raymond v. Farmers' Mut. Fire 

Ch. (N. Y.) 101. Ins. Co., 114 Mich. 386, 72 N. \V. 

"In re Enoch &c. Company's Arbi- 254; Cohn v. Wemme, 47 Ore. 146, 81 

tration (1910), 1 K. B. 327, 18 Am. Pac. 981, 8 Am. & Eng. Ann. Cas. 

6 Eng. Ann. Cas. 159 and note. 508; Caldwell v. Brooks Elevator 
''Hall V. Norwalk F. Ins. Co., 57 Co., 10 N. Dak. 575, 88 N. W. 700. 

Conn. 105, 17 Atl. 356; Bangor Sav. " Hemning v. Parker, 13 L. T. (N. 

Bank V. Niagara Fire Ins. Co., 85 S.) 795, 14 Wkly. Rep. 328; Wrig- 

Maine 68, 26 Atl. 991, 20 L. R. A. glesworth v. Morton, 2 Bibb (Ky.) 

650, 35 Am. St. 341; James v. 157; Blodgett v. Prince, 109 Mass. 

Schroeder, 61 Mich. 28, 27 N. W. 44; Sweeney v. Vaudry, 2 Mo. App. 

850; Wilberly V. Matthews, 91 N. Y. 352; Coryell v. Coryell, 1 N. J. L. 

648; Grmsby's Admrs. v. Bakewell, 441; Tennant v. Divine, 24 W. Va. 

7 Ohio 98; Welch v, Probst, 135 N. 387; Silliman v. Carr, 159 Cal. 155, 
Y. S. 642. 113 Pac. 135, 

"• See cases cited in note 93, § 2955. " Pepper v. Gorham. 4 Moo. C. P. 

" See cases cited in note 92, § 2955. 148, 16 E, C. L. 365 ; Graham v. 

" Leominster v. Fitchburg & W. R. Woodall, 86 Ala. 313, 5 So. 687 ■ Hook 

Co., 7 Allen (Mass.) 38. v. Philbrick, 23 N. H. 288- Shinnie 

'"Stone V. Baldwin, 226 111. 338, 80 v. Coil, 2 McCord Eq. (S. Car) 

N. E. 890, affg. 127 111. App. 563. 478 ; McCormick v. Blackford, 4 Grat 

"Cobb v. Dolphin Mfg. Co.. 108 (Va.) 133. 
N. Y. 463, 15 N. E. 438; Eau Claire 



179 



ARBITRATION. 



§ 2959 



§ 2959. Manner of reaching decision by arbitrators — Una- 
nimity. — The general rule is that unless the submission per- 
mits an award by smaller number, all the arbitrators must con- 
cur in the award to make it valid. *^ The submission may ex- 
pressly provide for an award by less than all.*" As in the case 
of jurors and their verdict, it is improper for arbitrators to reach 
the amount of award by striking an average between the sums 
each believes correct.^" Special tribunals under legislative au- 
thority to arbitrate public concerns are not governed by the rules 
relating to private arbitrations, and the rule in their case is that 
a majority may make an award unless there is a clear requirement 
for a unanimous award." If the statute requires a unanimous 
award, the parties by agreement cannot provide for a majority 



^'Nettleton v. Gridley, 21 Conn. 
531, 56 Am. Dec. 378; Bannister v. 
Read, 1 Gilra. (111.) 92; Byard v. 
Harkrider, 108 Ind. 376, 9 N. E. 
294; Richards v. Holt, 61 Iowa 529, 
16 N. W. 595; Payne v. Moore, 2 
Bibb (Ky.) 163, 4 Am. Dec. 689; 
Hubbard v. Great Falls Mfg. Co., 
80 Maine 39, 12 Atl. 878; Towne v. 
Jaquith, 6 Mass. 46, 4 Am. Dec. 84; 
Willis V. Higginbotham, 61 I\Iiss. 
164; Eames v. Fames, 41 N. H. 177; 
Hoff V. Taylor, S N. J. L. 829 ; Green 
V. Miller, 6 Johns. (N. Y.) 39, 5 Am. 
Dec. 184; Oakley v. Anderson, 93 N. 
Car. 108; Rhodes v. Baird, 16 Ohio 
St. 573; Weaver v. Powel, 148 Pa. 
St. 372, 23 Atl. 1070; Sherman v. 
Cobb, 15 R. I. 570, 10 'Atl. 591; Mem- 
phis &c. R. Co. V. Pillow, 9 Heisk. 
(Tenn.) 248; Owens v. Withee, 3 
Tex. 161 ; Hobson v. McArthur's 
Heirs, 6 Pet. (U. S.) 182, 10 L. ed. 
930. See also. Smith v. Walden, 26 
Ga. 249; Fish v. Vermillion, 70 
Kans. 348, 78 Pac. 811; Harryman 
V. Harryman, 43 Md. 140; McCurdy 
V. Daniell, 135 Mich. 55, 97 N. W. 
52. See note, IS Am. & Eng. Ann. 
Cas. 507 et seq. 

*° Patterson v. Leavitt, 4 Conn. 50, 
10 Am. Dec. 98; Cartledge v. Cut- 
liff, 21 Ga. 1; Security Live Stock 
Ins. Assn. v. Briggs, 22 111. App. 107 ; 
Kile V. Chapin, 9 Ind. 150; Kent v. 
French, Id Iowa 187, 40 N. W. 713 ; 
Fish V. Vermillion, 70 Kans. 348, 78 
Pac. 811; Thompson v. Mitchell, 35 



Maine 281 ; Witz v. Tregallas, 82 j\Id, 
351, ii Atl. 718; Doherty v. Doherty, 
148 Mass. 367, 19 N. E. 352; Dodge 
V. Brennan, 59 N. H. 138; Reeves v. 
Goff, 2 N. J. L. 143; Zorkowski v. 
Astor, 13 Misc. (N. Y.) 507, 69 N. 
Y. St. 114, 34 N. Y. S. 948; Kesler v. 
Kerns, 50 N. Car, 191; Ralston v. 
Ihmsen, 204 Pa. St, 588, 54 Atl. 365 ; 
Sherman v. Cobb, 15 R. I. 570, 10 
Atl. 591 ; Rixford v. Nye, 20 Vt. 132 ; 
Doyle V. Patterson, 84- Va, 800, 6 S. 
JS,. 138; Bachelder v. Wallace, 1 
Wash. Ter. 107. 

"Compare Brown v. Bellows, 4 
Pick. (Mass.) 179; Luther v, Med- 
bury, 18 R, I, 141, 26 Atl. 37, 49 Am. 
St, 753, See Whitlock v. Duffield, 
Hoffm. Ch. (N. Y.) 110, revd. 26 
Wend. (N. Y.) 55. 

■^ Omaha Water Co. v. City of 
Omaha, 162 Fed. 225, 89 C. C, A. 
205, 15 Am, & Eng. Ann, Cas, 498 
and note; Hewitt v, Craig, 86 Ky. 
23, 9 Ky. L, 232, 5 S. W. 280 ; Hub- 
bard V. Great Falls Mfg. Co,. 80 
Maine 39, 12 Atl. 878; Green v. Mill- 
er, 6 Johns. (N. Y.) 39, 5 Am. Dec. 
184; Wheeling Gas Co. v. Wheeling 
8 W. Va. 320; Darge v. Horicon Iron 
Mfg. Co., 22 Wis. 691. See also. 
Republic of Columbia v, Cauca Co,, 
106 Fed. 337, affd, 113 Fed. 1020, 
51 C. C. A, 604; Omaha Water Co. 
v, Omaha, 162 Fed, 225, 89 C. C. A, 
205, 15 Am. & Eng, Ann, Cas. 498. 
And see People v. Coghill, 47 Cal. 
361 ; Harryman v. Harryman, 43 Md. 



8 2959 



ARBITRATION AND AWARD. 



1 80 



award.°^ Other statutes permit majority awards, in the absence 
of an agreement in the submission to the contrary." Inference 
of an intention to provide for a majority award is suppHed by 
a provision for a third arbitrator to be appointed in case of dis- 
agreement." It was said before that all arbitrators must be pres- 
ent at the meetings for hearing and consultation, even if a major- 
ity may make an award.°° The failure of one or a minority of 
arbitrators to appear and act with the majority where reasonable 
notice and opportunity were given, allows the majority to proceed 
without their presence, where a majority may make an award.''" 
So if some of the arbitrators upon disagreement refuse to go 
ahead, the majority may proceed in accordance with their author- 
ity.^' Where arbitrators are authorized to make a majority 
award, an award executed by the majority is sufficient proof of a 
proper award,^* the presumption being that the minority from 
sufficient reason did not participate." 



140; Games v. Eames, 41 N. H. 177; 
People V. Walker, 23 Barb. (N. Y.) 
304; Downing v. Rugar, 21 Wend. 
(N. Y.) 178, 34 Am. Dec. 223; Young 
V. Buckingham, 5 Ohio 485 ; Green- 
ville County V. Spartanburg County, 
62 S. Car. 105, 40 S. E. 147; Newel 
V. Keith's Exr., 11 Vt. 214. 

°^ Tuskaloosa Bridge Co. v. Jera- 
ison, 33 Ala. 476; Osborn &c. Mfg. 
Co. V. Blanton, 109 Ga. 196, 34 S. E. 
306 ; Jeffersonville R. Co. v. Mounts, 
7 Ind. 669 ; Bowen v. Lazalere, 44 Mo. 
383 

=' Spencer v. Curtis, 57 Ind. 221; 
Buxton V. Howard, 38 Ind. 109; Bul- 
son V. Lohnes, 29 N. Y. 291; Locke 
V. Filley, 14 Hun (N. Y.) 139; King 
V. Grey, 31 Tex. 22. 

"Kelderhouse v. Hall, 116 111. 147 
4 N. E. 652 ; Security Live Stock Ins. 
Assn. V. Briggs, 22 111. App. 107; 
Guerrant v. Smith, 48 Miss. 90 ; Bat- 
tey v. Button, 13 Johns. (N. Y.) 187; 
Quay V. Westcott, 60 Pa. St. 163; 
Hobson V. McArthur, 16 Pet. (U. S.) 
182, 10 L. ed. 930; Stiringer v. Toy, 
33 W. Va. 86, 10 S. E. 26. But where 
an arbitrator is appointed to act 
throughout proceedings with no men- 
tion of disagreement, no such inten- 
tion is inferred. Willis v. Higgin- 
botham, 61 Miss. 164; Luther v. Med- 



bury, 18 R. I. 141, 26 Atl. 37, 49 Am. 
St. 753. See also, Tennessee Lumber 
Co. V. Clark, 182 Fed. 618, 105 C. C. 
A. 156. 

"" See cases in notes 72 to 75, § 2954. 

""Kile V. Chapin, 9 Ind. 150; Hew- 
itt V. Craig. 86 Ky. 23, 9 Ky. L. 232, 
S S. W. 280; Witz v. Tregallas, 82 
Md. 351, 33 Atl. 718; Doherty v. Do- 
herty, 148 Mass. 367, 19 N. E. 352; 
Shores v. Bowen, 44 Mo. 396 ; Broad- 
way Ins. Co. v. Doying, 55 N. J. L. 
569, 27 Atl. 927; Bulson v. Lohnes, 

29 N. Y. 291 ; Dkkerson v. Rorke, 30 
Pa. St. 390. 

" Maynard v. Frederick, 7 Cush. 
(Mass.) 247; Dodge v. Brennan, 59 
N. H. 138 ; Battey v. Button, 13 Johns. 
(N. Y.) 187; Robinson v. Bickley, 

30 Pa. St. 384; Doyle v. Patterson, 
84 Va. 800, 6 S. E. 138; King v. 
Grey, 31 Tex. 22. See also, Toledo 
S. S. Co. V. Zenith Transp. Co., 184 
Fed. 391, 106 C. C. A. 501. 

"'White Water Valley Canal Co. 
V. Henderson, 3 Ind. 3, 8 Blackf. 
(Ind.) 528; Thompson v. Mitchell, 35 
Maine 281 ; Sperry v. Ricker, 4 Allen 
(Mass.) 17; O'Neill v. Clark, 57 
Nebr. 760, 78 N. W. 256 ; Eastman v. 
Burleigh, 2 N. H. 484; Bachelder v. 
Wallace, 1 Wash. Ter. 107. 

"" Thompson v. Blanchard, 2 Iowa 



i8i 



ARBITRATION. 



§ 2960 



§ 2960. Umpire — Method of appointment. — An umpire is 
a person appointed with authority to make an award alone, if the 
arbitrators fail to agree."" A special arbitrator is one called in 
after disagreement, to act in conjunction with the others to make 
a majority award,"^ and is thus distinguished from an umpire. 
Where provision is made in the submission for a third person to 
be appointed in case of disagreement, the courts incline to hold 
him an umpire, with power to make an award alone,"^ unless it 
is clearly shown that the intent was for him to act in conjunc- 
tion with the others."^ Upon the appointment of an umpire and 
his entrance upon his duties in case of a disagreement of the 
original arbitrators, the functions of the arbitrators cease.°* Ar- 
bitrators have no power to appoint an umpire unless it is expressly 
given by the submission or other agreement of the parties."* It 
is not necessary for the umpire to be appointed before the arbi- 
tration begins,"" but he may properly be then selected and hear 



44; Bartolett v. Dixon, 12, Pa. St. 
129; Bachelder v. Wallace, 1 Wash. 
Ter. 107 ; Darge v. Horicon Iron 
Mfg. Co., 22 Wis. 691. 

""Ranney v. Edwards, 17 Conn. 
309; Crabtree v. Green, 8 Ga. 8; Tyler 
V. Webb, 10 B. Mon. (Ky.) 123; Ha- 
ven V. Winnisimmet Co., 11 Allen 
(Mass.) in, 87 Am. Dec. 723; Fris- 
sell V. Fickes, 27 Mo. 557; Day v. 
Hammond, 57 N. Y. 479, 15 Am. Rep. 
522; Rogers v. Carrothers, 26 W. 
Va. 238; Chandos v. American Fire 
Ins. Co., 84 Wis. 184, 54 N. W. 390, 
19 L. R. A. 321. See also, Hartford 
Fire Ins. Co. v. Bonner Mercantile 
Co., 44 Fed. 151, 11 L. R. A. 623, 
affd. 56 Fed. 378, 5 C. C. A. 524. See 
note 13, § 2940. 

"Lutz V. Linthicum, 8 Pet. (U. S.) 
165, 8 L. ed. 914. See also, Ranney 
V. Edwards, 17 Conn. 309; Cones v." 
Vanosdol, 4 Ind. 248 ; Haven v. Win- 
nisimmet Co., 11 Allen (Mass.) Zll, 
87 Am. Dec. 723; Willis v. Higgin- 
botham, 61 Miss. 164; Day v. Ham- 
mond, 57 N. Y. 479, IS Am, Rep. 
522; Quay v. Westcott, 60 Pa. St. 
163; Bassett's Admr. v. Cunning- 
ham's Admr., 9 Grat. (Va.) 684; 
Chandos v. American Fire Ins. Co., 
84 Wis. 184, 54 N. W. 390, 19 L. R. 
A. 321. 



"'Savannah, F. & W. R. Co. v. 
Decker, 94 Ga. 149, 21 S. E. 372; 
Scudder v. Johnson, 5 Mo. 551 ; Hob- 
son V. M'Arthur, 16 Pet. (U. S.) 
182, 10 L. ed. 930. 

"^Gaflfy V. Hartford Bridge Co., 
42 Conn. 143; Hartford Fire Ins. 
Co. V. Bonner Mercantile Co., 44 
Fed. 151, 11 L. R. A. 623, affd. 56 
Fed. 378, 5 C. C. A. 524; Ingraham 
V. Whitmore, 75 111. 24; Haven v. 
Winnisimmet Co., 11 Allen (Mass.) 
377, 87 Am. Dec. 723; Mullins v. 
Arnold, 4 Sneed (Tenn.) 262. 

" Crabtree v. Green, 8 Ga. 8 ; In 
re Grening, 74 Hun (N. Y.) 62, 
56 N. Y. St. 196, 26 N. Y. S. 117; 
Lyon V. Blossom, 11 N. Y. Super. 
Ct. 318. 

''See Elliott Ev., § 1659. McMa- 
han v. Spinning, 51 Ind. 187; Daniel 
V. Daniel, 6 Dana (Ky.) 93; Allen- 
Bradley Co. V. Anderson &c. Distil- 
leries Co., 99 Ky. 311, 18 Ky. L. 216, 
35 S. W. 1123; Norfleet v. Southall, 7 
N. Car. 189; Sharp v. Lipsey, 22 
Bailey (S. Car.) 113. See also, 
Gaffy V. Hartford Bridge Co., 42 
Conn. 143; Lyon v. Blossom, 11 N. 
Y. Super. Ct. 318. 

*■ Rogers v. Corrothers, 26 W. Va. 
238; Chandos v. American Fire Ins. 



2960 



ARBITRATION AND AWARD. 



I«2 



the evidence with the arbitrators, though he acts only in case of 
their disagreement." His appointment may be deferred until 
the time hmited for the action of the arbitrators has expired."' 
If the submission provides a certain way for making the appoint- 
ment of the umpire, its requirements must be fohowed."" If the 
arbitrators have the right to appoint, all must concur." Statu- 
tory requirements must be complied with." In the absence of 
restriction by statute or submission, appointment may be in 
parol." As a general rule, the selection of an umpire or special 
arbitrator by lot or chance is invalid. ^^ Appointment of an um- 
pire by parol where there is a requirement for appointment in 
writing, or other irregularity in appointment, as appointment by 
lot, may be waived by proceeding before him with knowledge of 
the irregularity." The presumption is in favor of regular ap- 
pointment, or if an irregularity appears, of consent to the irregu- 
larity." Some proof of appointment is necessary, but it seems 



Co., 84 Wis. 184, 54 N. W. 390, 19 L. 
R. A. 321. 

"See Elliott Ev., § 1659; Dudley 
V. Thomas, 23 Cal. 365 ; Newton v. 
West, 3 Mete. (Ky.) 24; Bigelow v. 
Maynard, 4 Cush. (Mass.) 317; 
Leonard v. Cox, 64 Mo. 32 ; Butler v. 
New York, 1 Hill (N. Y.) 489, revd. 
7 Hill (N. Y.) 329; Bryan v. Jeff- 
reys, 104 N. Car. 242, 10 S. E. 167; 
Woodrow V. O'Conner, 28 Vt. lid; 
Rogers v. Corrothers, 26 W. Va. 238 ; 
Chandos v. American F. Ins. Co., 84 
Wis. 184, 54 N. W. 390, 19 L. R. A. 
321. See also, Kaplan v. Niagara 
F. Ins. Co., n N. J. L. 780, 65 Atl. 
188. 

"'Harding v. Watts, 15 East 556; 
In re Grening, 74 Hun (N. Y.) 62, 
56 N. Y. St. 196, 26 N. Y. S. 117; 
Rogers v. Corrothers, 26 W. Va. 238; 
Chandos v. American Fire Ins. Co., 
84 Wis. 184, 54 N. W. 390, 19 L. R. 
A. 321. 

™Bryce v. Loutit, 21 Ont. App. 
100; MacPherson v. Drumm, 17 Rev. 
Leg. 672. 

"Direct Cable Co. v. Dominion 
Tel. Co., 28 Grant Ch. (U. C.) 648; 
Crisp V. Love, 65 N. Car. 126. 

"In re Grening, 74 Hun (N. Y.) 
62, 56 N. Y. St. 196, 26 N. Y. S. 117. 

"Knowlton v. Homer, 30 Maine 



552; Chase v. Jefts, 51 N. H. 494; 
Elmendorf v. Harris, 5 Wend. (N. 
Y.) 516, 23 Wend. (N. Y.) 628, 35 
Am. Dec. 587 ; Bryan v. Jeffreys, 104 
N. Car. 242, 10 S. E. 167; Frye v. 
Scott, 3 Cranch C. C. (U. S.) 294, 9 
Fed. Cas. No. 5144. 

" Elliott Ev., § 1659 ; Young v. Mil- 
ler, 3 Barn. & Cr. 407, 10 E. C. L. 
189; Lord v. Lord, 5 El. & Bl. 404, 1 
Jur. (N. S.) 893, 26 L. J. Q. B. 
34, 85 E. C. L. 404 ; Hart v. Kennedy, 
47 N. J. Eq. 51, 20 Atl. 29; In re 
Grening, 74 Hun (N. Y.) 62, 56 N. 
Y. St. 196, 26 N. Y. S. 117. 

"Elliott Ev., § 1659; In re Zuber, 
25 Ont. L. 252, Ann. Cas. 1912C. 
1002; Brush v. Fisher, 70 Mich. 469, 
38 N. W. 446, 14 Am. St. 510; Gra- 
ham v. Graham, 12 Pa. St. 128. See 
also, Knowlton v. Homer, 30 Maine 
552; Hart v. Kennedy, 47 N. J. Eq. 
51, 20 Atl. 29; In re Grening, 74 
Hun (N. Y.) 62, 56 N. Y. St. 196, 26 
N. Y. S. 117; Chandos v. American 
F. Ins. Co., 84 Wis. 184, 54 N. W. 
390, 19 L. R. A. 321. 

'° Greenwood v. Jonathan, 9 Ad. 
& El. 699, 36 E. C. L. 369; Savannah, 
F. & W. R. Co. V. Decker. 94 Ga. 
149, 21 S. E. 372 : Fowler v. Jackson, 
86 Ga. 337, 12 S. E. 811; Hart v. 
Kennedy, 47 N. J. Eq. 51, 20 Atl. 29. 



1 83' ARBITRATION. § 296 1 

this may be in parol.'"' The authority to appoint includes the au- 
thority to substitute if the first appointee refuses, but not author- 
ity to appoint another if he accepts/' 

§ 2961, Umpire — His authority. — The umpire may be ap- 
pointed within the time allowed to the original arbitrators to make 
the award/^ but he has no authority to act in the case before the 
expiration of such time, unless the arbitrators have disagreed 
and given notice that they will not act further, and do not under- 
take to act further.'* Though the appointment may be made 
before disagreement, he has no right to act until after disagree- 
ment,^" for in no case does the umpire's authority begin until after 
the disagreement of the arbitrators. No act of his before such 
time is binding,^^ except with the consent of the parties. How- 
ever, the award of the arbitrators* is not invalid merely because 
the umpire joined,^^ and if the arbitrators disagree, and the um- 
pire then is called upon, his award is not invalid because he took 
part with the arbitrators.*^ What constitutes such a disagree- 
ment as to justify the calling of an umpire depends on the circum- 
stances,** and the fact that an umpire is called in is prima facie 
proof of such disagreement. *° If there is in fact a disagreement, 
all the arbitrators need not concur in calling an umpire unless it 

"See Elliott Ev., § 1659; Still v. 1 Ky. L. (abstract) 271; Manufac- 

Halford, 4 Campb. 17; Osborne v. turers' & Builders' Fire Ins. Co. v. 

Wright, 12 U. C. Q. B. 65 ; Rison v. Mullen, 48 Nebr. 620, (^ N. W. 445 ; 

Berry, 4 Rand. (Va.) 275. See also, Christenson v. Carleton, 69 Vt. 91, Zl 

Trippet v. Eyre, 1 Show. 74, 3 Lev. Atl. 226. 

263, 2 Vent. 113; Cloud v. Sledge, 1 '^Ritchie v. Snowball, 26 N. Bruns. 

Bailey (S. Car.) 105. 258; King v. Cook, T. U. P. Charlt. 

"Oliver v. Collings, 11 East 367. (Ga.) 286, 4 Am. Dec. 715; Adams v. 

See Fowler v. Jackson, 86 Ga. 7,11, Ringo, 79 Ky. 211, 1 Ky. L. 251; 

12 S. E. 811. Rigden v. Martin, 6 Har. & J. (Md.) 

" See cases cited in note 67, § 2960. 403 ; Stevens v. Brown, 82 N. Car. 

"Smailes v. Wright, 3 M. & S. 460. 

559; Coppin v. Hurnard, 1 Lev. 285, "=In re Elliott, 2 DeG. & Sm. 17. 

2 Saund. 129; In re Grening, 74 ""Tunno v. Bird, 5 Barn. & Ad. 

Hun (N. Y.) 62, 56 N. Y. St. 196, 488, 27 E. C. L. 209; Broadway Ins. 

26 N. Y. S. 117; Richards v. Brock- Co. v. Doying, 55 N. J. L. 569, 27 

enbrough's Admr., 1 Rand. (Va.) 449. Atl. 927; Powell v. Ford, 4 Lea 

™ Byrne v. Usry, 85 Ga. 219, 11 S. (Tenn.) 278. 

E. 561; Greenwell v. Embree, 5 Ky. '"White v. Kirby, 2 Chamb. (U. 

L. (abstract) 313; Lockart v. Kidd, C.) 452; Sprigens v. Nash, 5 M. & S. 

2 Mill Const. (S. Car.) 216; Cooley 193; Tyler v. Webb, 10 B. Mon. 

V. Dill, 1 Swan. (Tenn.) 313; Chris- (Ky.) 123; Finney's Exrs. v. Miller, 

tenson v. Carleton, 69 Vt. 91, 37 Atl. 1 Bailey (S. Car.) 81; Powell v. Ford, 

226. 4 Lea (Tenn.) 278. 

^Whittaker v. Wallace's Admr., 



§ 2961 



ARBITRATION AND AWARD. 



184 



is required by statute.^" No authority to proceed exists until the 
parties are notified of the appointment of an umpire, and that he 
is about to proceed, and they must be given opportunity to be 
heard before him, or demand hearing before him.*^ If a demand 
is made, a hearing must be granted.^* But if the parties know 
of the umpire proceeding to consider the case on the evidence 
before the original arbitrators, and have been given opportunity 
to be heard, and fail to object, or to request' hearing, they are held 
to have waived the right to hearing and the award is valid/'' No- 
tice of meetings to hear evidence must be given to the parties,"" 
and in general, the same rules apply which governed the original 
arbitrators in the conduct of meetings. The necessity for notice 
may be waived." It is held that if the arbitrators have partially 
disagreed, the umpire may acoept their judgment about matters 
on which they agreed, and himself investigate only those as to 
which they disagreed.'^ However, he must make an entire 



'"Broadway Ins. Co. v. Doying, 55 
N. J. L. 569, 27 Atl. 927. 

'' Gaffy V. Hartford Bridge Co., 42 
Conn. 143 ; Walker v. Walker, 28 Ga. 
140; Alexander v. Cunningham, 111 
111. 511; Shively v. Knoblock, 8 Ind. 
App. 433, 35 N. E. 1028, 52 Am. St. 
467; Daniel v. Daniel, 6 Dana (Ky.) 
93; Hunt v. Juntz, 28 La. Ann. 500; 
Selby V. Gibson, 1 Har. & J. (Md.) 
362 note ; Wheaton v. Crane, 27 N. J. 
Eq. 368; Day v. Hammond, 57 N- Y. 
479, 15 Am. Rep. 522 ; Bray v. Staples, 
149 N. Car. 89, 62 S. E. 780, 19 L. R. 
A. (N. S.) 696n; Slater v. Le Grande 
Power Co., 43 Ore. 131, 72 Pac. 738; 
Coons V. Coons, 95 Va. 434, 28 S. 
E. 885, 64 Am. St. 804; Passmore 
V. Pettit, 4 Dall. (U. S.) 271, 1 L. 
ed. 830; Wood v. Helme, 14 R. I. 
325; Taber v. Jenny, 1 Sprague (U. 
S.) 315, Fed. Cas. 13720. See also. 
Bray v. Staples, 149 N. Car. 89, 62 
S. E. 780, 19 L. R. A. (N. S.) 696 
and note, 16 Am. & Eng. Ann. Cas. 
555 and note. 

»»In re Jenkins, 1 Dowl. (N. S.) 
276; Moore v. Powley, 1 Nova Scotia 
(2d ed.) 115; In re Salkeld, 12 Ad. 
& El. 767, 40 E. C. L. 380. 

«• Blood V. Shine, 2 Fla. 127; 
Knowlton v. Homer, 30 Maine 552; 



Jenkins v. Meagher, 46 Miss. 84 
Rounds V. Aiken Mfg. Co., 58 S 
Car. 299, 36 S. E. 714. See also 
Ranney v. Edwards, 17 Conn. 309 
Graham v. Graham, 9 Pa. St. 254, 
49 Am. Dec. 557. 

'"Walker v. Walker, 28 Ga. 140 
Alexander v. Cunningham, 111 111, 
511; Haven v. Winnisimmet Co., 11 
Allen (Mass.) 377, 87 Am. Dec. 723 
Elmendorf v. Harris, 23 Wend. (N 
Y.) 628, 35 Am. Dec, 587; Bray v 
Staples, 149 N. Car. 89, 62 S. E. 780, 
19 L. R. A. (N. S.) 696 and note, 16 
Am. & Eng. Ann. Cas. 555 and note 
Slater v. Le Grande Power Co., 43 
Ore. 131, 72 Pac. 738. 

""^ Ranney v. Edwards, 17 Conn. 
309; Graham v. Graham, 9 Pa. St. 
254, 49 Am. Dec. 557; Crabtree v. 
Green, 8 Ga. 8; Graham v. Graham, 
12 Pa. St. 128; Coons v. Coons,' 95 
Va. 434, 28 S. E. 885, 64 Am, St. 804. 

"'Blood V. Shine, 2 Fla. 127; Whit- 
taker V. Wallace's Admr., 1 Ky. L. 
(abstract) 271 ; Finney's Exrs. v. 
Miller, 1 Bailey (S. Car.) 81. See 
contra, Hartford Fire Ins. Co. v. 
Bonner Mercantile Co., 44 Fed. 151, 
11 L. R. A. 623, affd. 56 Fed. 378, and 
Coons V. Coons, 95 Va. 434, 28 S. 
E. 885, 64 Am. St. 804. 



i85 



ARBITRATION. 



§ 2961 



award/' unless the submission provides for a special award.®* 
He should use his own judgment.''^ He should not hear one ar- 
bitrator, on disagreement, in the absence of the other,®" or hear 
evidence ex parte,"^ or make his award by striking an average,"' 
or disregard any essentials required by the circumstances of sub- 
mission.®" In case of a special arbitrator, it is essential that the 
original arbitrators participate with him in the consideration after 
their disagreement, and a majority of all must join in the award.^ 
It is not necessary that the arbitrators after disagreement should 
join with the umpire.^ But joinder by the arbitrators in his hear- 
ing is mere surplusage, and does not invalidate the award.' The 
umpire must sign the award.* 



•= Wicks V. Cox, 11 Jur. 542; Crab- 
tree V. Green, 8 Ga. 8; Haven v. 
Winnisimmet Co., 11 Allen (Mass.) 
2,11, 87 Am. Dec. 723; Lyon v. Blos- 
som, 11 N. Y. Super. Ct. 318; Fin- 
ney's Exrs. V. Miller, 1 Bailey (S. 
Car.) 81; Bassett's Admr. v. Cun- 
ningham's Admr., 9 Grat. (Va.) 684. 

"Powell V. Ford, 4 Lea (Tenn.) 
278. 

°'Crabtree v. Green, 8 Ga. 8; In- 
graham V. Whitmore, 75 111. 24; Ha- 
ven V. Winnisimmet Co., 11 Allen 
(Mass.) m, 87 Am. Dec. 723. 

°° Cravens v. Estes, 144 Ky. 511, 
139 S. W. 761; Walker v. Charles- 
ton, Bailey Eq. (S. Car. )443; Mul- 
ling v. Arnold, 4 Sneed (Tenn.) 262. 
See also, Brook v. Badart, 16 C. B. 
(N. S.) 403, 10 Jur. (N. S.) 704, 33 
L. J. C. P. 246, 10 L. T. R. (N. S.) 
378, 111 E. C. L. 403. 

"Alexander v. Cunningham, 111 
111. 511. 

'"Hartford Fire Ins. Co. v. Bonner 
Mercantile Co., 56 Fed. 378, S C. C. 
A. 524. 

»° West Jersey R. Co. v. Thomas, 23 
N. J. Eq. 431, affd. 24 N. J. Eq. 567; 
Walker v. Charleston, Bailey Eq. (S. 
Car.) 443; Palmer v. Van Wyck, 92 
Tenn. 397, 21 S. W. 761. 

'See Tennessee Lumber Co. v. 
Clark, 182 Fed. 618, 105 C. C. A. 156. 
See also, Gaflfy v. Hartford Bridge 



Co., 42 Conn. 143; Kelderhouse v. 
Hall, 116 111. 147, 4 N. E. 652; Haven 
V. Winnisimmet Co., 11 Allen (Mass.) 
377, 87 Am. Dec. 723; Graham v. 
James, 7 Rob. (N. Y.) 468; Mullins 
v. Arnold, 4 Sneed (Tenn.) 261; 
Chandos v. American Fire Ins. Co., 
84 Wis. 184, 54 N. W. 390, 19 L. R. 
A. 321. 

== Sheffield v. Clark, IZ Ga. 92; San- 
ford V. Wood, 49 Ind. 165; Scudder 
V. Johnson, 5 Mo. 551 ; Jackson v. 
Merritt, 11 Abb. Pr. (N. Y.) 370. 

'Elliott Ev., § 1659; Sheffield v. 
Clark, 1Z Ga. 92 ; Kelderhouse v. Hall, 
116 111. 147, 4 N. E. 652; Sanford v. 
Wood, 49 Ind. 165; Tyler v. Webb, 
10 B. Mon. (Ky.) 123; Rigden v. 
Martin, 6 Har. & J. (Md.) 403; Jen- 
kins V. Meagher, 46 Miss. 84; Fris- 
sell V. Fickes, 27 Mo. 557; Jackson 
V. Merritt, 11 Abb. Pr. (N. Y.) 
370; Bryan v. Jeffreys, 104 N. Car. 
242, 10 S. E. 167; Boyer v. Aurand, 
2 Watts (Pa.) 74; Mullins v. Ar- 
nold, 4 Sneed (Tenn.) 262; Woodrow 
V. O'Conner, 28 Vt. 776; Rison v. 
Berry, 4 Rand. (Va.) 275. 

* Sheffield v. Clark, 11 Ga. 92; Kile 
V. Chapin, 9 Ind. 150; Daniel v. Dan- 
iel, 6 Dana (Ky.) 93; Jackson v. Mer- 
ritt, 11 Abb. Pr. (N. Y.) 370; Shields 
V. Renno, 1 Overt. (Tenn.) 313; 
Powell V. Ford, 4 Lea (Tenn.) 278. 



CHAPTER LXVII. 



AWARD. 



i 2962. 
2963. 

2964. 
2965. 
2966. 

2967. 



2968. 
2969. 
2970. 



2971. 
2972. 



Time of making award. 

Form and requisites of award 
— Publication. 

Mutuality of award. 

Certainty of award. 

Conformity of award with 
submission. 

Further of conformity of 
award to scope of submis- 
sion. 

Finality of award. 

Completeness of the award. 

Consistency of award — Pos- 
sibility of performance — 
Reasonableness — Entirety. 

Partial invalidity of award. 

Correction and reformation of 
award. 



§ 2973. 
2974. 

2975. 
2976. 



2977. 



2978. 
2979. 

2980. 

2981. 
2982. 



Recommitment of award. 

Ratification and repudiation of 
award. 

Construction of award. 

Parol evidence to vary or ex- 
plain award — Arbitrators as 
witnesses. 

Conclusiveness of award when 
unimpeached, and effect 
upon cause of action. 

Costs of arbitration. 

Impeachment of award — 
Grounds. 

Impeachment of award — 
Method. 

Performance of award. 

Enforcement of award. 



§ 2962. Time of making award. — The general rule is that 
an award to be valid must be made within the time limited by the 
submission.^ In the absence of proof, it is held, the presumption 
is that it was made within such time.^ If the time for making is 
not limited, the award may be made any time before the submis- 
sion is revoked by one of the parties.' The original time may be 
extended by agreement of parties.* In the construction of par- 
ticular submissions, it has been held that the arbitrators have the 



'Ryan v. Dougherty, 30 Cal. 218; 
Buntain v. Curtis, 27 111. 374; Knipe 
V. Harrington, 1 Blackf. (Ind.) 79; 
Bent v. Erie Tel. &c. Co., 144 Mass. 
165, 10 N. E. 778; Brown v. Copp, 5 
N. H. 223; Johnson v. Crawford, 212 
Pa. 502, 61 Atl, 1103; White v. Pur- 
year, 10 Yerg. (Tenn.) 441; Golds- 
t)orough V. Williams, 2 Cranch C. C. 
(U. S.) 401, 10 Fed. Cas. 5518; Jor- 
dan V. Lobe, 34 Wash. 42, 74 Pac. 
817. See cases cited in notes 46 and 
47, § 2952. 



'Owen V. Boerum, 23 Barb. (N. 
Y.) 187. 

'Saunders v. Heaton, 12 Ind. 20; 
Harding v. Wallace, 8 B. Mon. (Ky.) 
536; Small v. Thurlon, i1 Maine 
504; Rogers v. Tatum, 25 N. J. L. 
281 ; Nichols v. Rensselaer County 
Mut. F. Ins. Co., 22 Wend. (N. Y.) 
125; White v. Puryear, 10 Yerg. 
(Tenn.) 441; Tyson v. Robinson, 25 
N. Car. 333. 

* See cases cited in § 2946, note 65, 
and § 2952, note 48. 



1 86 



i87 



AWARD. 



2963 



whole of the last day to make the award, so an award made at 
night of such day is valid/ that if the time limit is "within"" or 
"until"' a certain day, an award made on that day is valid, and 
"month" has been held to mean a lunar, and not a calendar, 
month.^ An award is deemed made when drawn up and signed," or 
delivered to one party within the time limited.^" The right to 
object to an award made out of time may be waived,^^ or such 
award may be ratified.^^ A valid award is binding without the 
parties' consent or ratification.^^ 

§ 2963. Form and requisites of award — Publication. — Un- 
less required by submission or by statute, an award need be in 
no special or technical form of words ; it is sufficient that it shows 
a decision by the arbitrators of the matters submitted.^* It is 
unnecessary that the award recite that it is the award of the ar- 



° Withers v. Drew, Cro. Eliz. 676. 

' In re Higham, 9 Dowl. 203 ; Chap- 
man V. Ewing, 78 Ala. 403. 

'Kerr v. Jeston, 1 Dowl. (N. S.) 
538; Knox v. Simmonds, 3 Bro. C. 
Ch. 358. 

' In re Swinford, 6 M. & S. 226. 

•Brooke v. Mitchell, 6 M. & W. 
473; McClure v. Shroyer, 13 Mo. 
104; Ott V. Schroeppel, 3 Barb. (N. 
Y.) 56. 

" Rixford V. Nye, 20 Vt. 132. 

" See cases cited in note 52, § 2952. 

" See cases cited under § 2974. 

"Hopson V. Doolittle, 13 Conn. 236; 
Hynes v. Wright, 62 Conn. 325, 26 
Atl. 642, 36 Am. St. 344; Sears v. 
Vincent, 8 Allen (Mass.) 507. 

"In re Curtis (Conn.), 42 Am. St. 
200; Clark Millinery Co. v. National 
Union F. Ins. Co. (N. Car.), 75 S. 
E. -944; Payne v. Crawford, 97 Ala. 
604, 10 So. 911, 11 So. 725; Steere 
V. Brownell, 113 111. 415; Brown v. 
Harness, 11 Ind. App. 426, 38 N. E. 
1098; Snyder v. Rouse, 1 Mete. (Ky.) 
625; Kendall v. Bates, 35 Maine 357; 
Benson v. White, 101 Mass. 48; 
Spear v. Hooper, 22 Pick. (Mass.) 
144; Westover v. Armstrong, 24 
Nebr. 391. 38 N. W. 843; Tracy v. 
Herrick, 25 N. H. 381; Girdler v. 
Carter, 47 N. H. 305; Hoffman v. 
Hoffman, 26 N. J. L. 175; Rogers v. 
Tatum, 24 N. J. L. 281; Cobb v. 



Dolphin Mfg. Co., 108 N. Y. 463, 15 
N. E. 438; Hiscock v. Harris, 74 
N. Y. 108; Crawford v. Orr. 84 N. 
Car. 246; Rice v. Hassenpflug, 45 
Ohio St. 377, 13 N. E. 655; McCal- 
mont V. Whitaker, 3 Rawle (Pa.) 
84, 23 Am. Dec. 102 ; Bemus v. Clark, 
29 Pa. St. 251; Betsill v. Betsill, 30 
S. Car. SOS, 9 S. E, 652; Dougherty 
V. McWhorter, 7 Yerg. (Tenn.) 
239; Bowden v. Crow, 2 Tex. Civ. 
App. 591, 21 S. W. 612; Hartland v. 
Henry, 44 Vt. 593; Soper v. Frank, 
47 Vt. 368; Smith v. Smith, 4 Rand. 
(Va.) 95; Rogers v. Corrothers, 26 
W. Va. 238. In the following cases 
are set out, in whole or in part, forms 
of awards : Georgia Home Ins. Co. 
V. Kline, 114 Ala. 166, 21 So. 958; 
Blair V. Wallace, 21 Cal. 317; Averill 
V. Buckingham, 36 Conn. 359; Pike 
V. Stallings, 71 Ga. 860; Seaton v. 
Kendall, 61 111. App. 289, affd. 171 
111. 410, 49 N. E. 561; Carson v. 
Earlywine, 14 Ind. 256; Walnut Dist. 
Tp. V. Rankin, 70 Iowa 65, 29 N. W. 
806; Weir v. West, 27 Kans. 650; 
Shackelford v. Purket, 2 A. K. 
Marsh. (Ky.) 435, 12 Am. Dec. 422; 
Porter v. Buckfield Branch R. Co., 
32 Maine 539; Bushey v. Culler, 26 
Md. 534; Lutz v. Linthicum, 8 Pet. 
(U. S.) 165, 8 L. ed. 904; Doolittle 
V. Malcom, 8 Leigh (Va.) 608, 31 
Am. Dec. 671 ; Tennant v. Divine, 24 



§ 2963 



ARBITRATION AND AWARD. 



bitrators/" or recite their authority/" or that the parties were 
heard," or that all matters submitted were decided/' or all legal 
evidence admitted/' or all the arbitrators acted. ^° Nor does a 
misrecital invalidate it.^^ The requirements of the submission 
must be followed/^ unless waived.^* Likewise, statutory require- 
ments must be observed.^* The facts found by the arbitrators 
and their conclusions of law^^ or their reasons for decision,-'^ 
or the evidence on which the award is based,^^ are generally 
not required to be stated in the award. A parol award is 
good,^* but if the submission^" or statute requires the award to 
be in writing,'" such requirement must be followed. So where 



W. Va. 387. See also, Spooner v. 
Payne, 4 C. B. 328, 16 L. J. C. P. 
22s, 56 E. C. L. 328. 

"^ Saunders v. Heaton, 12 Ind. 20. 

"Baker v. Hunter, 16 M. & W. 
672, 16 L. J. Exch. 203. 

" Warner v. Collins, 135 Mass. 
26; Houghton v. Burroughs, 18 N. 
H. 499. 

" Brown v. Croyden Canal Co., 9 
Ad. & El. 522, 36 E. C. L. 188; Cald- 
well V. Dickinson, 13 Gray (Mass.) 
365, 

'° Leominster v. Fitchburg &c. W. 
R, Co., 7 Allen (Mass.) 38. 

" Hoffman v. Hoffman, 26 N. J. L. 
175; Rogers v. Tatum, 25 N. J. L. 
281 ; Rixford v. Nye, 20 Vt. 132. 

^ The following misrecitals have 
been held not to invalidate awards : 
that submission was in writing 
(Boots V. Canine, 94 Ind. 408), as to 
matters submitted (Diblee v. Best, 

11 Johns. (N. Y.) 103), as to date 
of submission (Byars v. Thompson, 

12 Leigh (Va.) 550, 37 Am. Dec. 
680), as to extension of time (Ad- 
dison v. Spittle, 6 Dowl. & L. 531). 

^ Everard v. Paterson, 6 Taunt. 625, 
1 E. C. L. 502 ; McCullough v. Myers, 
Hardin (Ky.) 197; Caldwell v. 
Dickinson, 13 Gray (Mass.) 365; 
Montague v. Smith, 13 Mass. 396; 
Bloomer v. Sherman, 5 Paige (N. 
Y.) 575; Fobes v. Backus, 1 Grant 
Cas (Pa ) 393 

^ Tudor V. Scovell, 20 N. H. 174; 
Perkins v. Wing, 10 Johns. (N. Y.) 
143 ; Sellick v. Addams, IS Johns. (N. 
Y.) 197; Gidley v. Gidley, 65 N. Y. 
169. 



^Darling v. Darling, 16 Wis. 644. 
But this case also holds that an 
award invalid as a statutory award 
may be valid as a common-law 
award. 

^In re Curtis, 64 Conn. 501, 30 
Atl. 769, 42 Am. St. 200; McKnight 
V. McCullough, 21 Iowa 111; Pick- 
ens V. Miller, 82 N. Car. 543. 

^In re Curtis, 64 Conn. 501, 30 
Atl. 769, 42 Am. St. 200; Crabtree v. 
Green, 8 Ga. 8; Patton v. Baird, 42 
N. Car. 255; Henry v. HilKard, 120 
N. Car. 479, 27 S. E. 130; Lamphire 
v. Cowan, 39 Vt. 420. 

^ Allen v. Miles, 4 Harr. (Del.) 
234; Powell v. Ril^, IS Lea (Tenn.) 
153. 

=»Byrd v. Odem, 9 Ala. 755; Smith 
V. Douglass, 16 III. 34; Skrable v. 
Pryne, 93 Iowa 691, 62 N. W. 21; 
Massie v. Spencer, 1 Litt. (Ky.) 
320; Philbrick v. Preble, 18 Maine 
255, 36 Am. Dec. 718; Williams v. 
Perkins, 83 Mo. 379; McISIuUen v. 
Mayo, 8 Sm. & ]\I. (Miss.) 298; 
Jones v. Dewey, 17 N. H. 596; Val- 
entine V. Valentine, 2 Barb. Ch. (N. 
Y.) 430; Gay v. Waltman, 89 Pa. St. 
453; Goodell v. Raymond, 27 Vt. 
241. 

^Thompson v. Mitchell, 35 Maine 
281; Tudor v. Scovell, 20 N. H. 171. 

™ McKnight V. McCullough, 21 
Iowa 111; Raguet v. Carmouche, 5 
La. Ann. 133; Darling v. Darling, 16 
Wis. 644. Award under statute must 
comply with its substantial condi- 
tipns. Tennessee Coal, I. & R. Co. v. 
Roussell, 155 Ala. 435, 46 So. 866, 
130 Am. St. 56. 



189 AWARD. § 2963 

a submission involves interests in realty which could only 
be transferred by writing, both submission'^ and award'^ must 
be in writing. It is not necessary that the award be executed 
in duplicate for each party, unless the submission so requires.^' 
Separate writings intended to form parts of an award must be 
construed together'* and statements written on the margin, back 
or underneath may be considered a part of the award and con- 
strued as if written in the body of it.'^ A written award should 
be signed by all the arbitrators, unless it is not required to be a 
unanimous award.'^ It is immaterial at what place the arbitra- 
tors meet and sign the award f it need not be signed on the day 
of agreement,'* and an award published without being signed may 
be validated by later signature before time for making the award 
has expired.'" A joinder in the award by an unauthorized per- 
son, as an umpire or contingent arbitrator, does not invalidate 
it.*" An award, unless there is a special requirement, need not 
be under seal.*^ But a stipulation in the submission for seal must 
be complied with.*^ Under certain statutes, acknowledgment*' 

^ See cases cited under note 23, v. Gurnee, 14 Kans. Ill ; Morrison v. 

§ 2942. Russell, 32 N. Car. 273. 

=" Philbrick V. Preble, 18 Maine 255, "Conrad v. Johnson, 20 Ind. 421. 

36 Am. Dec. 718; Buker V. Bowden, 83 "« Richardson v. Hartsfield, 27 Ga. 

Maine 67, 21 Atl. 748; Donnell v. 528; Phillips v. Phillips, 2 Ky. L. 

Lee, 58 Mo. App. 288; McMullen v. (abstract) 232. 

Mayo, 8 Sm. & M. (Miss.) 298; Jones '"Saunders v. Heaton, 12 Ind. 20. 

V. Dewey, 17 N. H. 596; French v. "Cones v. Vanosdol, 4 Ind. 248; 

New, 28 N. Y. 147, 2 Abb. Dec. (N. Estice v. Cockerell, 26 Miss. 127; 

Y.) 209; Gaylord v. Gaylord, 48 N. Rison v. Berry, 4 Rand. (Va.) 275. 

Car. 367. "White v. Fox, 29 Conn. 570; King 

■^Williard v. Bickford, 39 N. H. v. Cook, 1 T. U. P. Charlt. (Ga.) 

536; Martin v. McCormick, 34 N. J. 286, 4 Am. Dec. 715; Owen v. 

L. 23; Gidley v. Gidley, 65 N. Y. Boerura, 23 Barb. (N. Y.) 187; Mc- 

169; Buck v. Wadsworth, 1 Hill (N. Adam's Exrs. v. Stilwell, 13 Pa. St. 

Y.) 321. 90. This is true even if submission 

"' Cameron v. Castleberry, 29 Ga. is under seal, White v. Fox, 29 Conn. 

495; Rhodes v. Hardy, 53 Miss. 587; 570; Grove v. Swartz, 45 Md. 227; 

Ott V. Schroeppel, 5 N. Y. 482; Owen v. Boerum, 23 Barb. (N. Y.) 

Mathews v. Miller, 25 W. Va. 817. 187. 

See Stipp v. Washington Hall Co., S "^ King v. Cook, 1 T. U. P. Charlt. 

Blackf. (Ind.) 16. (Ga.) 286, 4 Am. Dec. 715; Mann v. 

== Griffith V. Jarrett, 7 Harr. & J. Richardson, 66 111. 481; McCullough 

(Md.) 70; Rhodes V. Hardy, 53 Miss. v. Myers' Exrs., Hard. (Ky.) 197; 

587- Whitcher v. Whitcher, 49 N. Grove v. Swartz, 45 Md. 227; Stan- 

H. 'l76, 6 Am. Rep. 486; Piatt v. ton v. Henry, 11 Johns. (N. Y.) 

Smith, 14 Johns. (N. Y.) 368. 133, 

=° Elliott Evidence, § 1660; State '" Heath v. Tenney, 3 Gray (Mass.) 



2963 



ARBITRATION AND AWARD. 



190 



or attestation may be necessary.** But attestation is not required 
at common law.*" It is held that the omission of attestation may 
be cured after publication.**^ Publication of an award is held 
essential to its validity, at least if required by submission 
or statute.*^ It is held that it ■ is a sufficient publication 
when the arbitrators have done something indicating the 
completion of their acts and declaring their final mind.** 
The wrongful withholding of an award by the arbitrators does 
not invalidate it for lack of publication.*" If the submission re- 
quires the award to be ready for delivery by a certain time, it 
must then be ready, and it is held ready to be delivered when it 
is drawn up and signed by the arbitrators.^" Unless required by 
submission or statute, it is not necessary that notice of award 
be given, "^ or the original or copies served on the parties. ^^ If 
the statute''^ or submission" requires, copies must be delivered to 



380 ; Gibson v. Burrows, 41 Mich. 713, 
3 N. W. 200; Burkland v. Johnson, 
SO Nebr. 858, 70 N. W. 388; In re 
Grening, 74 Hun (N. Y.) 62, 26 N. 
Y. S. 117. 

"Estep V. Larsh, 16 Ind. 82; Dar- 
ling V. Darhng, 16 Wis. 644. 

"Carson v. Earlywine, 14 Ind. 256; 
Valle V. North Missouri R. Co., il 
Iilo. 446. 

"Lovell V. Wheaton, 11 Minn. 92; 
Newman v. Labeaume, 9 Mo. 30; 
Tucker v. Allen, 47 Mo. 488. 

" Elliott Evidence, § 1661. Denraan 
V. Bayless, 22 111, 300; Russell v. 
Smith, 87 Ind. 457; Kingsley v. Bill, 
9 Mass. 198; McClure v. Shroyer, 13 
Mo. 104; Varney v. Brewster, 14 N. 
H. 49; Morrison v. Russell, 32 N. 
Car. 273 ; Morse v. Stoddard, 28 Vt. 
445; Russell v. Clark, 60 Wis. 284, 
18 N. W. 844. 

"IMcClure v. Shroyer, 13 Mo. 104; 
Huyck V. Wilson, 18 Ont. Pr. 44. 
Award held published when parties 
are informed that it is within their 
reach on payment of charges (]\Ius- 
selbrook v. Dunkin, 9 Bing. 605, 23 
E. C. L. 725; Knowlton v. Homer, 
30 Maine 552) ; reading held a pub- 
lication (Rundell v. Le Fleur, 6 Al- 
len (Mass.) 480; Pollard v. Lump- 
kin. 6 Grat. (Va.) 398, 52 Am, Dec. 
128) ; notice of readiness for de- 
livery held publication (Morse v. 
Stoddard, 28 Vt. 445); or delivery 



(Low V. Nohe, 16 111. 475 ; KnowUon 
V. Homer, 30 Maine 552; Rixford v. 
Nye, 20 Vt. 132). 

"Thompson v, Mitchell, 35 Maine 
281 ; New York Lumber &c, Co. v. 
Schneider, 119 N. Y. 475, 24 N. E. 4. 

°° Marks v, Marriot, 1 Ld, Raym, 
114; Rundell v. La Fleur, 6 Allen 
(Mass.) 480; Martin v. McCormick, 
34 N. J. L. 23; Houghton v. Bur- 
roughs, 18 N. H. 499. 

"'Elliott Ev,, § 1661; Denman v. 
Bayless, 22 111. 300; Russell v. Smith, 
87 Ind. 457; Fargo v. Reighard, 13 
Ind. App. 39, 39 N, E. 888, 41 N. 
E. 74; Houghton v. Burroughs, 18 
N. H. 499. 

"Anderson v. Miller, 108 Ala. 171, 
19 So. 302; Wade v. Powell, 31 Ga. 
1; Seely v. Pelton, 63 111. 101; Car- 
son V. Earlywine, 14 Ind, 256; Boots 
V. Cainine, 58 Ind. 450 ; Thompson v. 
IMitchell, 35 INIaine 281; New York 
Lumber &c. Co. v. Schneider, 119 N. 
Y, 475, 24 N. E. 4; Crawford v. 
Orr, 84 N. Car. 246; Pollard v. Lum- 
kin, 6 Grat. (Va.) 598, 52 Am. Dec. 
128. 

"'Crook v. Chambers, 40 Ala. 239; 
Estep v, Larsh, 16 Ind. 82; Ander- 
son V, Anderson, 65 Ind, 196; Wrig- 
glesworth v. Morton, 2 Bibb (Kv.) 
157; Kiger v. Coats, 18 Ind, 153. '81 
Am, Dec, 351; Marshall v, Bozorth, 
17 Pa, St, 409, 

" Goldsborough v. McWilliaras, 2 



^91 AWARD. -§ 2964 

the parties within a certain time. Unless submission is under a 
statute, or is made a rule of court, or it is specified in the sub- 
mission, the arbitrators are not required to return an award into 
court," yet if such return is required, there must be compliance."* 

§2964. Mutuality of award.— It is usually held that an 
award must be mutual to be binding," so, if a decision is given 
on only part of the matter submitted, giving to one party a bene- 
fit, to the other nothing, leaving him to pursue elsewhere his 
remedy as to the undecided matters, the award i& void for lack 
of mutuality.^^ The award must be a final discharge of all future 
claims by the party in whose favor the award is made, against 
the other upon the matters submitted, that is, final as to both 
parties.'^" The original rule was that an award must award some- 
thing on both sides, or be lacking in mutuality.*" The rule now 
is that if what is ordered done on one side necessarily includes 
the complete decision of all matters submitted, that is enough.'^ 
If one party is required to do void acts as a consideration for 
what the other is to do, the lack of mutuality makes the award 
void,*^ and if one party cannot be compelled to perform, he can- 
not compel performance by others."^ The presumption is that the 

Cranch C. C. (U. S.) 401, Fed. Cas. ""In Horrel v. McAlexander, 3 

5518. Rand. (Va.) 94, the court said: "The 

°^ Willingham v. Harrell, 36 Ala. first objection rests upon the idea, 

583; Tyler v. Dyer, 13 Maine 41. that something must be awarded on 

"^ Chisolm V. Cothran, 40 Ga. 273 ; both sides. This was certainly the 

McMillan v. Allen, 98 Ga. 405, 25 law formerly. As, (for example) if 

S. E. 505; McKnight v. McCullough, it had been awarded, that the ob- 

21 Iowa 111; Curley v. Chadburne, ligor, in a single bond, should pay 

119 Mass. 489; Burghardt v. Owen, the debt; the award was held not 

13 Gray (Mass.) 300; Russell v. binding, for want of mutuality, un- 

Clark, 60 Wis. 284, 18 N. W. 844. less it was added that he should 

" Yeamans v. Yeamans, 99 Mass. thereupon be discharged. * * * 

585 ; Gibson v. Powell, 5 Sm. & M. But, this has long been exploded." 

(Miss.) 712; McKeen v. Oliphant, 18 "Strong v. Beroujon, 18 Ala. 168; 

N. J. L. 442; Gooch v. McKnight, 10 Gaylord v. Gaylord, 4 Day (Conn.) 

Humph. (Tenn.) 229. 422; Gordon v. Tucker, 6 Maine 247; 

"'Conger v. James, 2 Swan (Tenn.) Peters v. Peirce, 8 Mass. 398; Purdy 

213; Gooch V. McKnight, 10 Humph, v. Delavan, 1 Caines (N. Y.) 304; 

(Tenn.) 229. Barretts v. Patterson, 1 N. Car. 126, 

°° Purdy V. Delavan, 1 Caines (N. 1 Am. Dec. 576; Blackledge v. Simp- 

Y.) 304; Blackledge v. Simpson, 3 son, 3 N. Car. 30, 2 Am. Dec. 614; 

N. Car. 30, 2 Am. Dec. 614; Barretts Horrel v. McAlexander, 3 Rand. 

V. Patterson, 1 N. Car. 126, 1 Am. (Va.) 94. 

Dec. 576; Lutz v. Linthicum, 8 Pet. "^Reynolds v. Reynolds, IS Ala. 

(U. S.) 165, 8 L. ed. 904; Macon v. 398. 

Crump, 1 Call (Va.) 575; Wood v. ""Copeland v. Wading River 

Shepherd, 2 Patt. & H. (Va.) 442. Reservoir Co., IDS Mass. 397; 



§ 2965 



ARBITRATION AND AWARD. 



192 



award is mutual/'' An award of payment on one side, which does 
not order a release on the other, has been often held sufficient 
mutuality, since mutuality is implied.*^ So, if the question sub- 
mitted is the ownership of property and the amount to be paid 
therefor, an award that one shall pay so much shows the title to 
be in the other.^" An award may be mutual, even if one party 
must perform his part before the other performs."' Nor does an 
award lack mutuality simply because the remedies of the parties 
for enforcement are dififerent.°* 

§ 2965. Certainty of award. — An award must be certain, 
expressed in language so that no reasonable doubt can arise as 
to its meaning upon its face or that matters in dispute have been 
conclusively settled,"" and as each party should know what he 
must do and what he can compel the other to do, the award should 
be in words comprehensible to the parties,'" for it cannot be aided 
by extrinsic averment.'^ What is meant by certainty is certainty 



Stephenson v. Oatman, 3 Lea (Tenn.) 
462; Furbish v. Hall, 8 Maine 315; 
Gibson V. Powell, 5 Sm. & M. (Miss.) 
712 ; Onion v. Robinson, IS Vt. 510. 

"Gerrish v. Ayres, 3 111. 245; 
Dickerson v. Tyner, 4 Blackf. (Ind.) 
253; Cox v. Jagger, 2 Cow. (N. Y.) 
638, 14 Am. Dec. 522; Horrel v. Mc- 
Alexander, 3 Rand. (Va.) 94. 

°= Reynolds v. Reynolds, 15 Ala. 
398; Blood v. Shine, 2 Fla. 127; 
Spofford V. Spofford, 10 N. H. 254; 
McKeen v. Oliphant, 18 N. J. L. 
442; Byers v. Van Deusen, 5 Wend. 
(N. Y.) 268; Karthaus v. Ferrer, 
1 Pet. (U. S.) 222, 7 L. ed. 121; 
Lamphire v. Cowan, 39 Vt. 420; 
Doolittle V. Malcom, 8 Leigh (Va.) 
608, 31 Am. Dec. 671; Fluharty v. 
Beatty, 22 W. Va. 698. 

™ Hanson v. Webber, 40 Maine 
194. 

"Munro v. Alaire, 2 Caines (N. 
Y.) 320; Kunckle v. Kunckle, 1 Dall. 
(Pa.) 364, 1 L. ed. 178. 

"Kunckle v. Kunckle, 1 Dall. (Pa.) 
364, 1 L. ed. 178. 

"" Tennessee Coal, Iron & R. Co. v. 
Roussell, 155 Ala. 435, 46 So. 866, 
130 Am. St. 56; Manuel v. Campbell, 
3 Ark. 324; Piersen v. Norman, 2 
Cal. 599; Carter v. Ross, 2 Root 
(Conn.) 507; Stanford v. Treadwell, 



69 Ga. 725; Ingraham v. Whitmore, 
75 111. 24; HoUingsworth v. Picker- 
ing, 24 Ind. 435 ; Tomlinson v. Ham- 
mond, 8 Iowa 40 ; Blanton v. Gale, 6 
B. Mon. (Ky.) 260; CoghiU v. Hord, 
1 Dana (Ky.) 350, 25 Am. Dec. 148; 
Calvert v. Carter, 6 Md. 135 ; Fletcher 
V. Webster, 5 Allen (Mass.) 566; 
Williams v. Williams, 11 Sm. & M. 
. (Miss.) 393; McKeen v. Oliphant, 18 
N. J. L. 442; Hiscock v. Harris, 74 
N. Y. 108; Thomas v. Molier, 3 Ohio 
266; McCracken v. Clarke, 31 Pa. St. 
498; Harris v. Social Mfg. Co., 9 R. 
I. 99, 11 Am. Rep. 224; Brickhouse 
V. Hunter, 4 Hen. & M. (Va.) 363, 
4 Am. Dec. 528; Pettibone v. Perkins, 
6 Wis. 616. 

'"Reynolds v. Reynolds, IS Ala. 
398 ; Manuel v. Campbell, 3 Ark. 324 ; 
Goldin V. Beall, 107 Ga. 354, 33 S. E. 
406; Church of St. Patrick v. Dakin, 
1 Rob. (La.) 202; Stanley v. Chap- 
pell, 8 Cow. (N. Y.) 235; Crissman v. 
Crissman, 27 N. Car. 498; Etnier 
V. Shope, 43 Pa. St. 110. 

'^Roundtree v. Turner, 36 Ala. 
555; Alexander v. McNear, 28 Fed. 
403; Howard v. Babcock, 21 III. 259; 
Whitcher v. Whitcher, 49 N. H. 176, 
6 Am. Rep. 486; McKeen v. Allen, 17 
N. J. L. 506; Stanley v. .South- 
wood, 45 Pa. St. 189. 



193 



AWARD. 



§2965 



to a common intent," reasonable certainty, the certainty requisite 
in any contract." Effect is given to necessary implication,'"' and 
if there be two interpretations, the one is adopted which would 
give efifect to the award.'^ The maxim, "certum est quod certum 
reddi potest," is applied to awards," and an award uncertain on 
its face may be made certain by referring to extrinsic matter, if 
such matter is clearly identified in the award." The degree of 
certainty necessary is affected by the nature of the matters sub- 
mitted.'* Mere uncertainty in the reasoning leading to the deci- 
sion, or as to collateral matters, will not affect the award, if the 
decision itself is certain.'" Parol evidence is not competent to 
show the intent of the arbitrators, where the award is uncertain 
on its face.^° An award should be certain in the amount of money 



"Payne v. Crawford, 97 Ala. 604, 
10 So. 911, 11 So. 725; Pike v. Stal- 
lings, 71 Ga. 860; Burrows v. Guthrie, 
61 111. 70 ; Galloway v. Webb, Hardin 
(Ky.) 326; Oscutt v. Butler, 42 
Maine 83; Bush v. Davis, 34 Mich. 
190; Caldwell v. Dickinson, 13 Gray 
(Mass.) 365; Parker v. Dorsey, 68 
N. H. 181, 38 Atl. 785; McKeen v. 
Allen, 17 N. J. L. 506; Purdy v. 
Delavan, 1 Caines (N. Y.) 304; Clark 
Millinery Co. v. National Union Fire 
Ins. Co. (N. Car.) 75 S. E. 944; 
• Crawford v. Orr, 84 N. Car. 246; 
Wood V. Earle, 5 Rawle (Pa.) 44; 
Harris v. Social Mfg. Co., 9 R. I. 
99, 11 Am. Rep. 224; Soper v. Frank, 
47 Vt. 368; Rogers v. Carrothers, 26 
W. Va. 246; Strong v. Strong, 9 
Cush. (Mass.) 560. 

"Bush V. Davis, 34 Mich. 190; 
■ Rogers V. Tatum, 25 N. J. L. 281 ; 
Perkins v. Giles, 50 N. Y. 228; Akely 
V. Akely, 16 Vt. 450. 

'* Whittemore v. Mason, 14 111. 392 ; 
Sears v. Vincent, 8 Allen (Mass.) 
507; Coxe v. Lundy, 1 N. J. L. 255; 
Jones V. Cuyler, 16 Barb. (N. Y.) 
576; McDermott v. United States Ins. 
Co., 3 Serg. & R. (Pa.) 604; Lamp- 
hire y. Cowan, 39 Vt. 420. 

"Hiscock V. Harris, 74 N. Y. 108; 
Cullifer V. Gilliam, 31 N. Car. 126; 
Buckley v. Ellmaker, 13 Serg. & R. 
(Pa.) 71. 

™ Odum V. Rutledge &c. R. Co., 94 
Ala. 488, 10 So. 222; Coulter v. 
Hitchens, 3 Harr. (Del.) 70; Shef- 
field V. Clark, 73 Ga. 92; Rogers v. 

13 — Contracts, Vol. 4 



Tatum, 25 N. J. L. 281; Carson v. 
Carter, 64 N. Car. 332; Remelee v. 
Hall, 31 Vt. 582, 16 Am. Dec. 140; 
Eureka Pipe Line Co. v. Simms, 62 
W. Va. 638, 59 S. E. 618. 

"Williams v. Warren, 21 111. 541; 
Hollingsworth v. Pickering, 24 Ind. 
435; Colcord v. Fletcher, SO Maine 
398; Benson v. White, 101 Mass. 48; 
Clement v. Comstock, 2 Mich. 359; 
Cochran v. Bartle, 91 Mo. 636, 3 S. 
W. 854; Pike v. Gage, 29 N. H. 461; 
Jackson v. Ambler, 14 Johns. (N. Y.) 
96; Whitcomb v. Preston, 13 Vt. 53; 
Whitcher v. Whitcher, 49 N. H. 176; 
6 Am. Rep. 486; Kingston v. Kin- 
caid, 1 Wash. (C. C.) 448, Fed. Cas. 
7821; Brickhouse v. Hunter, 4 Hen. 
& M. (Va.) 363, 4 Am. Dec. 528. See 
also, Santee v. Keister, 6 Binn. (Pa.) 
36, and compare Mather v. Day, 106 
Mich. 371, 64 N. W. 198. 

"Tennessee Coal, I. & R. Co. v. 
Roussell, 155 Ala. 435, 46 So. 866, 130 
Am. St. 56; Henrickson v. Reinback, 
iZ 111. 299; Barretts v. Patterson, 1 
N. Car. 126, Tayl. (N. Car.) Zl, 1 
Am. Dec. 576. See also, Palgrave 
Gold Min. Co. v. McMillan (1892), 
App. Cas. 460. 

™Hays V. Miller, 12 Ind. 187; 
Lamphire v. Cowan, 39 Vt. 420 ; Gid- 
dings V. Hadaway, 28 Vt. 342. See 
Love V. Honeybourne, 4 Dowl. & R. 
814, 16 E. C. L. 222. 

""Alexander v. McNear, 28 Fed. 
403; Mulligan v. Perry, 64 Ga. 567 
Clark V. Burt, 4 Cush. (Mass.) 396 
Parker v. Parker, 103 Mass. 167 



§ 2965 



ARBITRATION AND AWARD. 



194 



to be paid/^ But it is not necessary that the amount be set out in 
figures, if it may be ascertained by mere mathematical computa- 
tion/^ An award of costs, not naming the amount, is not void 
for uncertainty, where there is a proper court officer to tax the 
same.^^ Tlie award need not indicate the steps by which the ar- 
bitrators reached the decision, nor is a finding of facts necessary ; 
it is sufficient that the result is stated.** Property should be 
sufficiently described in the award that it may be iden- 
tified.*° This is especially true of a description of real 



Aldrich v. Jessiman, 8 N. H. 516; 
Stanley v. Southwood, 45 Pa. St. 189. 

^ Comer v. Thompson, 54 Ala. 265 ; 
Hollingsworth v. Pickering, 24 Ind. 
435; Walnut Dist. Tp. v. Rankin, 70 
Iowa 65, 29 N. W. 806; Blanton v. 
Gale, 6 B. Mon. (Ky.) 260; Fletcher 
V. Webster, 5 Allen (Mass.) 566; 
Colcord V. Fletcher, 50 Maine 398; 
Carter v. Calvert, 4 Md. Ch. 199; 
St. Paul Fire & Marine Ins. Co. v. 
Gotthelf, 35 Nebr. 351, 53 N. W. 
137; Leslie v. Leslie, 50 N. J. Eq. 
103, 24 Atl, 319; Waite v. Barry, 12 
Wend. (N. Y.) 377; Carson v. Car- 
ter, 64 N. Car. 332 ; Real Estate Title 
Ins. Co. V. McNichol, 217 Pa. St. 
545, 66 Atl. 768; Harris v. Social 
Mfg. Co., 8 R. I. 133, 5 Am. Rep. 
549; Duberry v. Clifton, Cooke 
(Tenn.) 328. See also, Alexander v. 
McNear, 28 Fed. 403; Ingraham v. 
Whitmore, 75 111. 24; Howard v. 
Babcock, 21 111, 259; Parker v. Eg- 
gleston, 5 Blackf. (Ind.) 128; Herbst 
V. Hagenaers, 137 N. Y. 290, 33 N. 
E. 315 ; Spalding v. Irish, 4 Serg. & 
R. (Pa.) 322. 

'^Gudgell V. Pettigrew, 26 111. 305; 
St. Patrick's Church v. Dakin, 1 
Rob. (La.) 202; Colcord v. Fletcher, 

50 Maine 398; Witz v. Tregallas, 82 
Md. 351, 33 Atl. 718; Bush v. Davis, 
34 Mich. 190; Cochran v. Bartle, 91 
Mo, 636, 3 S. W, 854; Chase v, Jefts, 

51 N. H. 494; Waite v. Barry, 12 
Wend. (N. Y.) 377; Kendrick v. Tar- 
bell, 26 Vt, 416; Eureka Pipe Line 
Co. V, Simms, 62 W. Va. 628, 59 S. 
W. 618. So an award of a certain 
sum with interest is held sufficiently 
certain (Shells v. Chickering, 7 Mete. 
(Mass,) 316; Emery v. Hitchock, 12 
Wend. (N. Y.) 156; Whire v. Jones, 



8 S. & R. (Pa,) 349), or an award 
requiring the payment of a certain 
proportion of the cost of work or- 
dered to be done (Perkihs v, Giles, 
50 N. Y, 228), or payment of an an- 
nuity for life (Remelee v. Hall, 31 
Vt. 582, 76 Am, Dec. 140). 

'^Pedley v. Goddard, 7 T. R. 73; 
Reynolds v. Reynolds, 15 Ala, 398; 
Brown v, Warnock, 5 Dana (Ky.) 
492; Garitee v. Carter, 16 Md. 309; 
Boughton V. Seamans, 9 Hun (N, Y,) 
392; Wright v. Smith, 19 Vt. 110; 
The Ship Liverpool Packet, 2 
Sprague (U. S,) 37, Fed. Cas, 8407. 
But if there is no tribunal to tax 
costs, an award of costs, in general 
terms, may be void for uncertainty. 
School Dist, No, 3 v, Aldrich, 13 
N. H. 139; Schuyler v. Van Der 
Veer, 2 Caines (N, Y,) 235. See 
cases cited in note 90, § 2978, 

''In re Connor, 128 Cal, 279, 60 
Pac. 862; In re Curtis, 64 Conn, 501, 
30 Atl, 769, 42 Am, St, 200 ; Crabtree 
V, Green, 8 Ga, 8; Shackelford v, 
Purket, 2 A. K, Marsh (Ky,) 435, 
12 Am, Dec, 422 ; Comery v, Howard, 
81 Maine 421, 17 Atl, 318; Ebert v, 
Ebert, 5 Md. 353 ; Clement v. Com- 
stock, 2 Mich, 359; Henry v, Hil- 
Hard, 120 N, Car, 479, 27 S, E, 130; 
Graham v. Graham, 12 Pa. St. 128; 
Powell V, Riley, 15 Lea (Tenn,) 153; 
Lamphire v. Cowan, 39 Vt, 420. 

"'Carter v, Ross, 2 Root, (Conn,) 
507; Banks v, Adams, 23 Maine 259; 
McKeen v. Allen, 17 N, J, L. 506; 
Schuyler v. Van Der Veer, 2 Caines 
(N, Y,) 235. Crissman v, Crissman, 
27 N. Car, 498; Thomas v, Molier, 3 
Ohio 266; Etnier v, Shope, 43 Pa, St, 
110, A provision in an award that 
the "note to Mclndoe belongs to both 



195 



AWARD. 



§ 2965 



property,^® yet no greater certainty is required than in a 
deed." An award as to boundaries, it is held, need not actually 
lay out the line,^* but there is some confusion in the cases.'* 
Though it is not necessary to name a time for the performance 
of an act,°° yet if an attempt is made to fix a time, it must be 
fixed with certainty."^ Where money is awarded, and no date for 
payment specified, it is considered immediately due.°^ The award 
must be certain as to the persons who are to do the acts ordered,"^ 
yet they need not be named, if certainly identified.'* The doing 
of a personal act directed must be clearly stated.*^ If persons or 
things are not designated in the award exactly as in the submis- 
sion, but the intent is plain, such variance is immaterial. °° A 
repugnant award is bad."' Where several things are ordered 
done by one award, uncertainty as to part of them is not a de- 



parties," was held certain in Bancroft 
V. Grover, 23 Wis. 463, 99 Am. Dec. 
195. 

°° Brown v. Hankerson, 3 Cow. (N. 
Y.) 70; Duncan v. Duncan, 23 N. Car. 
466; Murray v. Bruner, 6 Serg. & R. 
(Pa.) 276; McCracken v. Clarke, 31 
Pa. St. 498; Lyle v. Rodgers, S 
Wheat. (U. S.) 394, 5 L. ed. 117. 

"Payne v. Crawford, 97 Ala. 604, 
11 So. 725; Williams v. Warren, 21 
III. 541 ; Jackson v. Ambler, 14 Johns. 
(N. Y.) 96; Farris v. Caperton, 1 
Head (Tenn.) 606; Akely v. Akely, 
16 Vt. 450; Rogers v. Corrothers, 26 
W. Va. 238. 

** Galloway v. Webb, Hard. (Ky.) 
318; Aldrich v. Jessiman, 8 N. H. 
516; Crawford v. Orr, 84 N. Car. 
246 ; Rogers v. Corrothers, 26 W. Va. 
238. 

*° Cases in which a description of 
boundaries was held sufficient. Red- 
den V. Smith, 5 Harr. (Del.) 389; 
Caldwell v. Dickinson, 13 Gray 
(Mass.) 365; Bacon v. Wilber, 1 
Cow. (N. Y.) 117; Massey v. 
Thomas, 6 Binn. (Pa.) 333. Cases in 
which a description of boundaries 
was held insufficient. Clark v. Burt, 4 
Cush. (Mass.) 396; Giddings v. Had- 
daway, 28 Vt. 342. 

°° Waddle v. Downman, 12 M. & 
W. 562; Freeman v. Bernard, 1 Salk. 
69. 

=* Evans V. Sheldon, 69 Ga. 100; Al- 



fred V. Kankakee &c. R. Co., 92 III. 
609; Williams v. Landon, 14 Serg. & 
R. (Pa.) 338; Carnochan v. Christie, 
11 Wheat. (U, S.)) 446, 6 L. ed. 516. 

"'Ehrman v. Stanfield, 80 Ala. 118; 
Parmelee v. Allen, 32 Conn. 115; 
Blood V. Shine, 2 Fla. 127; Dilks 
V. Hammond, 86 Ind. 563; Imlay v. 
Wikoff, 4 N. J. L. 132; Soper v. 
Frank, 47 Vt. 368. 

™ Lawrence v. Hodgson, 1 Y. & J. 
16; Hoffman v. Hoffman, 26 N. J. L. 
175; Grier v. Grier, 1 Dall. (Pa.) 173, 
1 L. ed. 87 ; Lyle v. Rodgers, 5 Wheat. 
(U. S.) 394, 5 L. ed. 117. 

"Armitt v. Breame, 2 Ld. Raym. 
1076, 1 Salk. 76 ; Baily v. Curling, 20 
L. J. Q. B. 235, 2 L. M. & P. 161; 
Graham v. Bates (Tenn.), 45 S. W. 
465; Alexander v. Mulhall, 1 Tex. 
Unrep. Cas. 764; Lutz v. Linthicum, 
3 Pet. (U. S.) 165, 8 L. ed. 904; 
Grier v. Grier, 1 Dall. (U. S.) 173, 
1 L. ed. 87. 

""Pike V. Gage, 29 N. H. 461; 
Perkins v. Giles, SO N. Y. 228 ; Banks 
V. Adams, 23 Maine 259; Etnier v. 
Shope, 43 Pa. St. 110; Harris v. So- 
cial Mfg. Co., 9 R. I. 99, 11 Am. 
Rep. 224. 

"Schultz V. Halsey, 3 Sandf. (N 
Y.) 405; Munro v. Alaire, 2 Caines 
(N. Y.) 320; Grier v. Grier, 1 Dall. 
(U. S.) 173, 1 L. ed. 87. 

"Curd V. Wallace, 7 Dana (Ky.) 
190, 32 Am. Dec. 85. 



§ 2966 



ARBITRATION AND AWARD. 



196 



fense against the others,"^ but uncertainty as to what is to be done 
by one party will render void what is to be done by the other. "^ 

§ 2966. Conformity of award with submission. — Since ar- 
bitrators derive their authority from the submission, which pre- 
scribes the extent and limits of such authority, their award must 
conform in substance and in form to the submission,^ all matters 
submitted must be passed upon,^ and any attempted judgment 
upon matters outside the submission is unauthorized.^ The ar- 
bitrator cannot, by deciding upon his own jurisdiction, obtain 



"'Stearns v. Cope, 109 111. 340; 
Brown v. Warnock, 5 Dana (Ky.) 
492; Leominster v. Fitchburg &c. R. 
Co., 7 Allen (Mass.) 38; Karthaus 
V. Ferrer, 1 Pet. (U. S.) 229, 7 L. 
ed. 124. 

"' Mather v. Day, 106 Mich. 371, 64 
N. W. 198; Schuyler v. Van Der 
Veer, 2 Caines (\. Y.) 235; Brown 
V. Hankerson, 3 Cow. (N. Y.) 70; 
Murray v. Bruner, 6 Serg. & R. 
(Pa.) 276. 

^See Elliott Ev., § 1658; Brown v. 
Mize, 119 Ala. 10, 24 So. 453; Gates 
V. Treat, 25 Conn. 71; Moollc v. 
Wood, 95 Fed. 537; Beckham v. 
Beckham, 129 Ga. 831, 60 S. E. 184; 
Sawtells V. Howard, 104 Mich. 54, 
62 N. W. 156; Palmer v. Van Wyck, 
92 Tenn. 397, 21 S. W. 761 ; Howard 
V. Edgell, 17 Vt. 9; Hines v. Fisher, 
61 W. Va. 565, 56 S. E. 904; Bart- 
lett V. L. Bartlett &c. Co., 116 Wis. 
450, 93 N. W. 473. See also, Waller 
V. Shannon, 44 Conn. 480; Johnson 
V. Noble, 13 K. H. 286, 38 Am. Dec. 
485. 

^ Snead & Co. Iron Works v. Mer- 
chants' Loan & Trust Co., 225 111. 
442, 80 N. E. 237, 9 L. R. A. (N. S.) 
1007; Llarrison v. Creswick, l3 C. B. 
399, 76 E. C. L. 399; White v. Arthur, 
59 Cal. 33 ; Fooks v. Lawson, 1 Marv. 
(Del.) lis, 40 Atl. 661, 1 Hard. (Del.) 
115; Bigler v. Sweitzer, 127 III. App. 
14; Burnam v. Burnam, 6 Bush (Ky.) 
389; McNear v. Bailey, 18 Maine 
251 ; Parker v. Clark, 104 Mass. 431 ; 
Boston & L. R. Corp. v. Nashua & 
L. R. Corp., 139 Mass. 463, 31 N. E. 
751 ; Sides v. Brendinger, 14 Nebr. 
491, 17 N. W. 113; Davis v. Dyer, 54 
N. H. 146; Smith v. Demarest, 8 
N. J. L. 195; Jones v. Welwood, 71 



N. Y. 208; Blackledge v. Simpson, 
3 N. Car. 30, 2 Am. Dec. 614; John- 
ston V. Brackbill, 1 Pt. & W. (Pa.) 
364; Gooch v. McKnight, 10 Humph. 
(Tenn.) 229; Carnochan v. Christie, 
11 Wheat. (U. S.) 446, 6 L. ed. 516; 
Smith V. Potter, 27 Vt. 304, 65 Am. 
Dec. 198; Bean v. Bean, 25 W. Va. 
604; Pettibone v. Perkins, 6 Wis. 
616. 

'Anderson v. Miller, 108 Ala. 171, 
19 So. 302; Lee v. Onstott, 1 Ark. 
206; White v. Artliur, 59 Cal. 33; 
Waller v. Shannon, 44 Conn. 480; 
Stevens v. Gray, 2 Harr. (Del.) 347; 
Crane v. Barry, 54 Ga. 500 ; Sherfy 
V. Graham, 72 111. 158 ; Thompson v. 
Blanchard, 2 Iowa 44; Blanton v. 
Gale, 6 B. Mon. (Ky.) 260; In re 
Wallace, 31 La. Ann. 335 ; Boynton 
V. Frye, 33 Maine 216: Mead v. 
Owen, 80 Vt. 273, 67 Atl. 722, 13 Am. 
& Engv Ann. Cas. 231. See also, 
Snead & Co. Iron Works v. Mer- 
chants' Loan & Trust Co., 225 111. 
442, 80 N. E. 237, 9 L. R. A. (N. S.) 
1007; Walsh v. Gilmor, 3 Harr. & 
J. (Md.) 383, 6 Am. Dec. 502; Camp 
V. Sessions, 105 Mass. 236; Saw- 
tells V. Howard, 104 Mich. 54, 62 
N. W. 156; Daniels v. Willis, 7 Gill. 
(Minn.) 374; Williams v. Williams, 
11 Sm. & M. (Miss.) 393; Squires 
V. Anderson, 54 Mo. 193; Whitcher 
v. Whitcher, 49 N. H. 176, 6 Am. 
Rep, 486; Leslie v. Leslie, 52 N. J. 
Eq. 332, 31 Atl. 724 ; Hiscock v. Har- 
ris, 74 N. Y. 108: Bryant v. Fisher, 
85 N. Car. 69; Parrish v. Higgin- 
botham, 39 Ore. 598, 65 Pac. 984; 
Collins V. Freas, 77 Pa. St. 493; 
Sessions v. Basfield, 2 Bay (S. Car.) 
94; Palmer v. Van Wyck, 92 Tenn. 
397, 21 S. W. 761; Fortune v. Kille- 



197 



AWARD. 



§ 2966 



authority not given by the submission.* The adoption of a rule 
of decision different from that prescribed in the submission, for 
instance, the making of an award not in conformity with law, 
where the submission required a decision in accord with law, is 
a departure from the submission, making the award bad." The 
award need not in terms aver its conformity with the submission, 
for all presumptions are that it does not award anything not in- 
cluded in the submission, unless the contrary is shown." 

In general, an award is not set aside for an omission unless 
the complaining party was injured by the omission.'^ So, to make 
an award invalid for omission, the matters omitted should have 
been brought to the arbitrators' attention,* but this is sufficiently 
done where they are specifically mentioned in the submission." 
And parties who have by subsequent agreement jvithdrawn mat- 
ters from the submission cannot object because such matters were 
not included in the award.^" The refusal of arbitrators to con- 
sider all matters submitted makes the award void.^^ The pre- 



brew, 86 Tex. 172, 23 S. W. 976; 
McCormick v. Gray, 13 How. (U. 
S.) 26, 14 L. ed. 36; Cook v. Carpen- 
ter, 34 Vt. 121, 80 Am. Dec. 670 ; Pol- 
lock's Admr. v. Southerlin, 25 Grat. 
(Va.) 78; Dunlap v. Campbell, S 
W. Va. 195; Pettibone v. Perkins, 6 
Wis. 589. 

* Adams v. New York Bowery F. 
Ins. Co., 85 Iowa 6, 51 N. W. 1149; 
Sawyer v. Freeman, 35 Maine 542 ; 
Dodds V. Hakes, 114 N. Y. 260, 21 
N. E. 398; Halstead v. Seaman, 82 
N. Y. 27, 37 Am. Rep. 536; Walker 
V. Walker, 60 N. Car. 255; Hath- 
away V. Hagan, 59 Vt. 75, 8 Atl. 
678. 

^Estes V. Mansfield, 6 Allen 
(Mass.) 69; Borrowe v. Milbank, 13 
N. Y. Super. Ct. 680, 5 Abb. Pr. (N. 
Y.) 28; Palmer v. Van Wyck, 92 
Tenn. 397, 21 S. W. 761. 

"See Elliott Ev., § 1655; Reynolds 
V, Reynolds, 15 Ala. 398; Blair v. 
Wallace, 21 Cal. 317; Hubbard v. 
Firman, 29 III. 90; McCullough v. 
McCuUough, 12 Ind. 487; Ebert v. 
Ebert, 5 Md. 353; Gaylord v. Norton, 
130 Mass. 74; Bush v. Davis, 34 
Mich. 190; Richardson v. Huggins, 
23 N. H. 106; Bvers v. Van Deusen, 
5 Wend. (N. Y.) 268; Bryant v. 



Fisher, 85 N. Car. 69; Wightman v. 
Pettis, 29 Pa. St. 283 ; Soper v. Frank, 
47 Vt. 368. 

'Morgan v. Smith, 1 Dowl. (U. S.) 
617; Davy v. Faw, 7 Cranch (U. S.) 
171, 3 L. ed. 305. 

'Karthaus v. Ferrer, 1 Pet. (U. 
S.) 222, 7 L. ed. 121. See 
Muldrow V. Norris, 12 Cal. 331; 
Buntain v. Curtis, 27 111. 374; Mc- 
Near v. Bailey, 18 Maine 251; 
Ott V. Schroeppel, S N. Y. 482; 
Hewitt V. Furman, 16 Serg. & R. 
(Pa.) 135; Houston &c. R. Co. v. 
Newman, 2 Tex. App. Civ. Cas., § 349 ; 
Young V. Kinney, 48 Vt. 22. See also, 
Elson V. Rolfe, 2 Smith 459. 

" Middleton v. Weeks, Cro. Jac. 
200; Muldrow v. Norris, 12 Cal. 331. 

"Ballance v. Underbill, 3 Scam. 
(111.) 453; Nashua &c. R. Corp. v. 
Boston R. &c. Corp., 157 Mass. 268, 
31 N. E. 1060; Varney v. Brewster, 
14 N. H. 49. See Steeve v. Brownell, 
113 III. 415; Skrable v. Pryne, 93 
Iowa 691, 62 N. W. 21. 

"Harker v. Hough, 7 N. J. L. 512; 
Ruckman v. Ransom, 35 N. J. L. 
565 ; Kaplan v. Niagara F. Ins. Co., 
73 N. J. L. 780, 65 Atl. 188. See also, 
Stewart v. Webster, 20 U. C. Q. B. 
469. 



§ 2967 ARBITRATION AND AWARD. 1 98 

sumption is that all matters suomitted were decided unless the 
contrary is shown/^- Extrinsic evidence is admissible to show 
what matters were included in the award/^ It is held that the 
party in whose favor the award was made, or a third person, 
cannot object on the ground that unauthorized matters were de- 
cided.^* The inclusion of matters not submitted may render the 
award void at law/'' If the award is severable as to the matters 
not within the submission, it may be upheld as to the matters 
within the submission.^" 

§ 2967. Further of conformity of award to scope of sub- 
mission. — Where there is a submission of all matters and dif- 
ferences between the parties, the arbitrators are authorized to 
consider all matters of account, claims, debts or demands of each 
party against the other,^' and such general submission includes 

"Fooks V. Lawson, 1 Marv. (Del.) "See cases cited in note 70, § 2971 

lis, 40 Atl. 661; Hadaway v. Kelly, Bogan v. Daughdrill, 51 Ala. 312 

78 111. 286; McCuUough v. McCul- Richardson v. Payne, 55 Ga. 167 

lough, 12 Ind. 487; Hayes v. Fors- JMcCuUough v. McCullough, 12 Ind. 

koll, 31 :\Iaine 112; Ebert v. Ebert, 487; Lynch v. Nugent, 80 Iowa 

5 Md. 353 ; Gaylord v. Norton, 130 422, 46 N. W. 61 ; Adams' Admr. v. 

Mass. 74; Clement v. Comstock, 2 Ringo, 79 Kv. 211, 1 Ky. L. (ab- 

Mich. 359; Sides v. Brendlinger, 14 stract) 251; Stanwood v. Mitchell, 59 

Nebr. 491, 17 N. W. 113; New York Maine 121; Garitee v. Carter, 16 Md, 

Lumber &c. Co. v. Schneider, 119 N. 309; Warner v. Collins, 135 Mass 

Y. 475, 24 N. E. 4; Rice v. Hassen- 26; Tracy v. Herrick, 25 N. H. 381 

pflug, 45 Ohio St. Zn, 13 N. E. 655 ; Rogers v. Tatum, 25 N. J. L. 281 

Smith V. Clark, 22 Tex. Civ. App. Nichols v. Rensselaer County Mut, 

485, 54 S. W. 1052; Karthaus v. Ins. Co., 22 Wend. (N. Y.) 129 

Ferrer, 1 Pet. (U- S.) 222, 7 L. ed. Shrump v. Parfitt, 84 Hun (N. Y.) 

121 ; Jensen v. Deep Creek &c. Farm, 341, 33 N. Y. 409, 67 N. Y. St. 242 

27 Utah 66, 74 Pac. 427. See Elliott Griffin v. Hadley, 53 N. Car. 82 

Evidence, § 1655 ; Hawes v. Coombs, South v. South's Admrs., 70 Pa. St, 

34 Ind. 455 ; Bean v. Wendell, 22 N. 195 ; McCall v. McCall, 36 S. Car. 

H. 582; Dickerson v. Roske, 30 Pa. 80, IS S. E. 348; Martin v. Martin, 

St. 390; Young v. Kinnev, 48 Vt. 22; 12 Leigh (Va.) 495. 

McCord v. Flynn, 111 Wis. 78, 86 N. "Burns v. Hindman, 7 Ala. 531 

W. 668. Stewart v. Grier, 7 Houst. (Del.) 

"Adams v. Adams, 8 N. H. 82 ; New 378, 32 Atl. 328: Barker v. Belknap's 

York V. Butler, 1 Barb. (N. Y.) 325; Estate, 39 Vt. 168; Baker v. Town- 

Dodds V. Hakes, 114 N. Y. 260, 21 send, 1 Moore C. P. 120, 7 Taunt. 

N. E. 398; Brown v. Brown, 49 N. 422, 18 Rev. Rep. 521, 2 E. C. L. 428; 

Car. 123; Perkins v. Kershaw, 1 Hill Xobles v. Peebles, 13 Serg. & R. 

Eq. (S. Car.) 344. (Pa.) 319; Kauffman v. Myer, 6 

"Galvin V. Thompson, 13 Maine Watts (Pa.) 134; Cobb v. Dolphin 

367; Penniman v. Patchin, 6 Vt. 325. Mfg. Co.. 108 N. Y. 463, IS N. E. 

'= Beckett v. Midland R. Co., L. R. 438; Smith v. Wilkinsburg, 172 Pa. 

1 C. P. 241 ; Briggs v. Smith, 20 Barb. St. 121, 33 Atl. 371. See cases cited in 

(N. Y.) 409; Butler v. New York, 1 § 2949 note 40, et seq. 
Hill (N. Y.) 489, revd. 7 Hill (N. 
Y.) 329. 



199 AWARD. § 2967 

questions concerning real as well as personal property." A re- 
stricted submission confines the arbitrators strictly to the matters 
enumerated.^" Where demands on one side only are submitted, 
the arbitrators may not award claims on the other side.°" Where 
a suit is pending and the entire controversy is submitted out of 
court, whatever claim may arise in the suit is included in the sub- 
mission." It is held, however, that the pleadings and issues in 
the suit may be looked to to determine the scope of the submis- 
sion.^'^ Of course, if the specific matters in the suit and all other 
matters in controversy are submitted, the arbitrators are not 
restricted to the former.^^ The submission of general matters 
gives the arbitrators power to look into and determine all matters 
incidental to, or connected with, the particular matter in dispute.^* 
So under a submission of all matters between partners, the 
arbitrators may go into matters respecting the division of 
assets and property so far as required,^^ and a broad 
enough submission may even allow arbitrators to go back 
of a former settlement or former award.^° Arbitrators have 
power to direct the conduct of the parties so far as is necessary 

"Merritt v. Merritt, 11 111. 565; & C. (N, Y.) 11; Woods v. Page, 

Penniman v. Rodman, 13 Mete. 37 Vt. 252. 

(Mass.) 382; Byers v. Van Deusen, "Williams v. Warren, 21 111. 541; 

5 Wend. (N. Y.) 268; Bryant v. Gerry v. Eppes, 62 Maine 49; Penni- 

Fisher, 85 N. Car. 69; Gratz v. man v. Rodman, 13 Mete. (Mass.) 

Gratz, 4 Rawle (Pa.) 411. 382; Ford v. Burleigh, 60 N. H. 278; 

"See cases cited in note SO, § 2949 Locke v. Filley, 14 Hun (N. Y.) 139; 

and note 3, § 2966. Pearson v. Barrmger, 109 N. Car. 

™ Brown v. Mize, 119 Ala. 10, 24 398, 13 S. E. 942; Connor v. 

So 453; Black v. Hickey, 48 Maine Simpson, 104 Pa. St. 440; Rounds 

545; Robinson v. Moore, 17 N. H. v. Aiken Mfg. Co., 58 S. 

479 Car. 299, 36 S. E. 714; Henniken v. 

^Fowler v. Jackson, 86 Ga. 337, Brown, 4 Baxt. (Tenn.) 397; Bow- 

12 S E. 811 ; McMillan v. James, 105 den v. Crow, 2 Tex. Civ. App. 591, 

111. 194; Adams' Admr. v. Ringo, 79 21 S. W. 612; Slocum v. Damon, 1 

Ky 211, 1 Ky. L. 251. See cases cited Pin. (Wis.) 520. 

in notes 52, 53, 54, § 2949. ==Redick v. Skelton, 18 Ont. 100; 

"Ives V. Ashelby, 26 111. App. 244; Simons v. Mills, 80 Cal. 118, 22 Pac. 

Bulsom V. Lampman, 1 Kans. 324; 25; Fulmore v. McGeorge, 91 Cal. 

Jackson v. Hoffman, 31 La. Ann. 97; 611, 28 Pac. 92; Runyon v. Brokaw, 

Ing v State 8 Md. 287; Masury v. 5 N. J. Eq. 340; Richardson v. Hug- 

Whiton 111 N Y. 679, 18 N. E. 638, gins, 23 N. H. 106; Byers v. Van 

2 Silvernail Ct. App. (N. Y.) 123; Deusen, 5 Wend. (N Y.) 268; 

Harrison V. Wortham, 8 Leigh (Va.) Wooden v. Little, 3 McCord. (S. 

296; Austin v. Clark, 8 W. Va. 236. Car.) 487. ^^ ^ . , - ^ ^ 

'''Harmon v Jennings, 22 Maine -° Maynard v. Frederick, 7 Cush. 

240- Jones v Welwood, 71 N. Y. 208, (Mass.) 247; Mickles v. Thayer, 14 

affg 9 Hun (N. Y.) 166, 1 Thomp. Allen (Mass.) 114; Emmet v. Hoyt, 



§ 2967 



ARBITRATION AND AWARD. 



200 



to accomplish the settlement and satrsfaction of matters submit- 
ted.-' They have power to order releases of demands which are 
part of matters submitted.^^ They may direct a conveyance of 
land, where the right to land is involved in the submission.^" 
They may award payment of interest on the amount awarded, or 
on a demand, award damages in ejectment as well as possession, 
or require a bond to be given as security for the performance of 
an act ordered.^" They may not order the doing of acts unlaw- 
ful or against public policy.^^ When they are to ascertain the 
amount due on a demand, they may fix a reasonable time for 
payment, unless restricted by the submission. ^^ An award con- 
taining matters outside the original submission may be enforced 
if it appears such matters were brought before arbitrators, and 
heard without objection.^^ Matters arising between parties sub- 
sequent to the submission are not included in a general submis- 
sion, but such restricts the arbitrators to the consideration of mat- 



17 Wend. (N. Y.) 410; Bryan v. 
Jeffreys, 104 N. Car. 242, 10 S. E. 
167. See also Walnut v. Rankin, 70 
Iowa 65, 29 N. W. 806; Carey v. 
Wilcox, 6 N. H. 177. 

"' Kankakee & S. W. R. Co. v. Al- 
fred, 3 111. App. 511; Cohen v. Habe- 
nicht, 14 Rich. Eq. (S. Car.) 31; 
See Grenfield v. Edgcombe, 7 Q. 
B. 661, 14 L. J. Q. B. 322, 53 E. C. 
L. 661 ; Winter v. Lethbridge, 1 
M'Clel. 253, 13 Price 533, 27 Rev. Rep. 
721 ; Boynton v. Frye, 33 Maine 216. 

'*Burt V. McFadden, 58 111. 479; 
Weston V. Stuart, 11 Maine 326; 
Tallman v. Tallman, 5 Cush. (Mass.) 
325; Guerrant v. Smith, 48 Miss. 90; 
Whitcher ^. Whitcher, 49 N. H. 176, 
6 Am. Rep. 486; Dockery v. Randolph 
(Tex. Civ. App.), 30 S. W. 270; 
Shepherd v. Briggs, 28 Vt. 81. May 
order release of a mortgage, Bryant 
V. Fisher, 85 N. Car. 69. 

"^ Williams V. Warren, 21 111. 541; 
Loring v. Whittemore, 13 Gray 
(Mass.) 228; Den v. Allen, 2 N. J. L. 
32; Miller v. Moore, 7 Serg. &. R. 
(Pa.) 164; Preston v. Whitcomb, 11 
Vt. 47. See also, Penniman v. Rod- 
man, 13 Mete. (Mass.) 382. 

'"Interest, Noyes v. McLaflin, 62 
111. 474; In re Burke, 191 N. Y. 437, 
84 N. E. 40S. See Hamilton v. Wort, 



7 Blackf. (Ind.) 348, and Rouse v. 
Zeigle, 1 Browne (Pa.) 329; damages 
in ejectment. Miller v. Melchor, 35 N. 
Car. 439. See Moore v. Gherkin, 44 
N. Car. 73, and Austin v. Snow's 
Lessee, 2 Dall. (U. S.) 157, 1 L. ed. 
329, 1 Yeates 156 ; indemnity or se- 
curity, Burton v. Wigley, 1 Bing. N. 
Cas. 665, 2,7 E. C. L. 307; Cook v. 
Jenkins, 35 Ga. 113. 

^^ Turner v. Swainson, 2 Gale 133, 
5 L. J. Exch. 266, 1 M. & W. 572; 
Alder v. Savill, 5 Taunt. 454, 1 E. C. 
L. 237; Harrington v. Brown, 9 Al- 
len (Mass.) 579. 

""Eggleston v. Tavlnr, 45 U. C. Q. 
B. 479; Noyes v. McLaflin. 62 111. 
474. See also, Walkr v. Shannon, 44 
Conn. 480, and Booth v. Garnett, 2 
Str. -1082. May order payment in in- 
stalments, Donican v. Mulrv, 69 Iowa 
583, 29 N. W. 612 ; Remelee v. Hall, 
31 Vt. -582, 76 Am. Dec. 140. 

" Brown v. Bellows, 4 Pick. 
(Mass.) 179; Doane College v. Lan- 
ham, 26 Nebr. 421, 42 N. W. 405; 
Leslie v. Leslie, 52 N. J. Eq. 332. 31 
Atl. 724; Belt v. Poppleton, 11 Ore. 
201, 3 Pac. 27; Alexander v. West- 
moreland Bank, 1 Pa. St. 395 ; Woods 
v. Page, 27 Vt. 252. See also, Robert- 
son V. Marshall, 155 N. Car. 167, 71 
S. E. 67. 



201 



AWARD. 



2968 



ters existing at the time of the submission." But in cases where 
the determination of liabiHty at the time of submission involves 
liability for future amounts or damages, such future damages 
may be concluded by the award, unless restricted by the submis- 
sion.^° In general, the power of arbitrators is confined to the 
parties to a submission, and by their award they can in no way 
bind one not a party.'^ But a stranger having an interest in the 
subject-matter," may ratify or adopt an award, or may by his 
conduct be estopped from questioning it.^^ An award directing 
a stranger to perform an act is void in that respect, and a party 
who cannot enforce it in his favor is not concluded by its deci- 
sions against him.^° An award directing payment to a stranger 
for the benefit of a party to the submission is good.^° 

§ 2968. Finality of award. — It is held essential that an 
award shall be final,*^ that is, it must give both parties repose and 



'* Thrasher v. Haynes, 2 N. H. 429; 
Bixby V. Whitney, 5 Greenl. (Maine) 
192; Graham v. Graham, 9 Pa. St. 
254, 49 Am. Dec. 557. See Pomroy v. 
Kibbee, 2 Root (Conn.) 92. 

='Noyes v. McLaflin, 62 III. 474; 
AIIen-Bradley Co. v. Anderson &c. 
Distilling Co., 16 Ky. L. (abstract) 
350; Maryland &c. R. Co. v. Porter, 
19 Md. 458; Cheshire Bank v. Rob- 
inson, 2 N. H. 126; Curtis v. Gokey, 
68 N. Y. 300. Compare, Duren v. 
Getchell, 55 Maine 241; CuUifer v. 
Gilliam, 31 N. Car. 126. 

^ Benedict v. Pearce, 53 Conn. 496, 
5 Atl. 371; Poulbain v. Poulbain, 79 
Ga. 11, 4 S. E. 81; Woodward v. 
Woodward, 14 111. 370; Milner v. 
Turner's Heirs, 4 T. B. Mon. (Ky.) 
240; Emery v. Fowler, 38 Maine 99; 
Munn V. Reed, 4 Allen (Mass.) 
431; Mahagan v. Mead, 63 N. H. 
570, 3 Atl. 919; Hazen v. Addis, 14 
N. J. L. 333; Coan v. Osgood, 15 
Barb. (N. Y.) 583; Mays v. Myatt, 3 
Baxt. (Tenn.) 309; Snow v. Walker, 
42 Tex. 154; Robinson v. Hawkins, 
38 Vt. 693. See Titus v. Durkee, 12 
U. C. C. p. 367; Chapman v. 
Champion, 2 Day (Conn.) 101 ; Vos- 
burgh V. Bame, 14 Johns. (N. Y.) 
302; Penniman v. Patchin, 6 Vt. 
325. 

"Terre Haute &c. R. Co. v. Har- 



ris, 126 Ind. 7, 25 N. E. 831; Boston 
V. Brazer, 11 Mass. 447; Snow v. 
Walker, 42 Tex. 154. 

°= Russell V. Allard, 18 N. H. 222; 
Humphreys v. Gardner, 11 Johns. 
(N. Y.) 61. 

'"Gibson V. Powell, 5 Sm. & M. 
(Miss.) 712; Brazill v. Isham, 1 E. D. 
Smith (N. Y.) 437, affd. 12 N. Y. 9; 
Martin v. Williams, 13 Johns. (N. 
Y.) 264; Barnet v. Gilson, 3 Serg. 
& R. (Pa.) 340. See Smith v. 
Sweeny, 35 N. Y. 291. 

"King V. Cook, T. U. P. Charlt. 
(Ga.) 286, 4 Am. Dec. 713; Scearce v. 
Scearce, 7 Ind. 286; Boston v. Brazer, 
11 Mass. 447; Lamphire v. Cowan, 
39 Vt. 420; Macon v. Crump, 1 Call. 
(Va.) 575. See also. Wood v. Ad- 
cock, 7 Exch. 468, 16 Jur. 251, 21 L. 
J. Exch. 204. 

"Manuel v. Campbell, 3 Ark. 324; 
Jacob V. Ketcham, 37 Cal. 197; King 
V. Cook, T. U. P. Charlt. (Ga.) 286, 
4 Am. Dec. 715 ; Ingraham v. Whit- 
more, 75 111. 24; Colcord v. Fletcher, 
50 Maine 398; Ebert v. Ebert, 5 Md. 
353; Smith v. Holcorab, 99 Mass. 
552; Hoit v. Berger-Crittenden Co., 
81 Minn. 356, 84 N. W. 48 ; Hazen v. 
Addis, 14 N. J. L. 333; Waite v. 
Barry, 12 Wend. (N. Y.) 377: Pat- 
ton V. Baird, 42 N. Car. 255 ; Connor 
V. Simpson, 104 Pa. St. 440; Hattier 



§ 2968 



ARBITRATION AND AWARD. 



202 



quiet in the matters submitted, in return for tlie obligations im- 
posed upon them.' It must absolutely conclude the dispute, and 
be such that it may be performed by the parties without further 
ascertainment of their rights and privileges, or further litigation 
to adjust the matters submitted.*^ It is sufficient that it appears 
from the whole award that these matters were determined/^ 
Finality does not mean that nothing remains to be done to exe- 
cute the award, but means that all things to be done shall be de- 
termined and defined.''* It is not necessary to provide a method 
of enforcement,*^ nor is it any less final because litigation may 
ensue in enforcement.*" If the submission be of a pending suit, 
an award that the suit shall cease, or be discontinued, or be no 
further prosecuted, is held final. *^ An award that nonsuit be 
entered is held not final.*^ A party's right to what is awarded 
him may be made to depend upon his performance of a condition 
precedent, and the award still be final.*' An unconditional alter- 



V. Etinaud, 2 Desauss. Eq. (S. Car.) 
570; Hooker v. Williamson, 60 Tex. 
524; Carnochan v. Christie, 11 
Wheat. (U. S.) 446, 6 L._ ed. 516; 
B^'ars V. Thompson, 12 Leigh (Va.) 
550, 2,1 Am. Dec. 680; Dunlap v. 
Campbell, 5 W. Va. 195; Dunden v. 
Starin, 19 Wis. 261. 

"Porter v. Scott, 7 Cal. 312; St. 
Patrick's Church v. Dakin, 1 Rob. 
(La.) 202; Colcord v. Fletcher, SO 
Maine 398; Strong v. Strong, 9 
Cush. (Mass.) 560; Hazen v. Addis, 
14 N. J. L. Zii; Hicks v. Magoun, 
38 App. Div. (N. Y.) 573, 56 N. Y. S. 
484; Cannady v. Roberts, 41 N. Car. 
422; Spalding v. Irish, 4 Serg. & R. 
(Pa.) 322. 

'^Fulmore v. McGeorge, 91 Cal. 
611, 28 Pac. 92; Short v. Kincaid, 1 
Bibb (Ky.) 420; Caldwell v. Dick- 
inson, 13 Gray (Mass.) 365; Bar- 
retts V. Patterson, 1 N. Car. 126, 
Tayl. (X. Car.) 37, 1 Am. Dec. 576; 
Cohen v. Habenicht, 14 Rich. Eq. (S. 
Car.) 31; Akely v. Akely, 16 Vt. 
450 ; Wood V. Shepherd, 2 Patt. & H. 
(Va.) 442. 

" Strong V. Strong, 9 Cush. 
(Mass.) 560; Owen v. Boerum, 23 
Barb. (N. Y.) 187, 195; Akely v. 
Akely, 16 Vt. 450. See also, Clement 
V. Comstock, 2 Mich. 359 ; In re 
Williams, 4 Denio (N. Y.) 194. 



^ Crabtree v. Green, 8' Ga. 8 ; 
Strong V. Strong, 9 Cush. (Mass.) 
560; Jones v. Boston Mill Corp., 6 
Pick. (Mass.) 148; Parker v. Dor- 
sey, 68 N. H. 181, 38 Atl. 785 ; Trues- 
dale V. Straw, 58 N. H. 207; Lamp- 
hire V. Cowan, 39 Vt. 420. 

" Henrickson v. Reinback, 33 111. 
299; Short v. Kincaid, 1 Bibb (Ky.) 
420; Johnston v. Dulin, 10 Ky. L. 
403; Bell v. Price, 22 N. J. L. 578; 
Case V. Ferris, 2 Hill (N. Y.) 75; 
Wilson V. Brown, 82 Pa. St. 437; 
Harris v. Social Mfg. Co., 8 R. I. 
133, 5 Am. Rep. 549; Akely v. Akely, 
16 Vt. 450 ; Smith v. Smith, 4 Rand. 
(Va.) 95. 

"Cox V. Jagger, 2 Cowen (N. Y.) 
638, 14 Am. Dec. 522 ; Purdy v. Dela- 
van, 1 Caines (N. Y.) 304; Rixford 
V. Nve, 20 Vt. 132. 

•'Reynolds v. Reynolds, 15 Ala. 
398; Gates v. Great, 25 Conn. 71; 
Mobile V. Wood, 95 Fed. 537; Beck- 
ham V. Beckham, 129 Ga. 831, 60 S. 
E. 184; Sawtells v. Howard, 104 
Mich. 54, 62 N. W. 156; Palmer v. 
Van Wyck, 92 Tenn. 397, 21 S. W. 
761; Howard v. Edgell, 17 Vt. 9; 
Hines v. Fisher, 61 W. Va. 565, 56 
S. E. 904; Donaldson v. Buhlanan, 
134 Wis. 117, 113 N. W. 638, 114 N 
W. 431. 

"Burns v. Hindman, 7 Ala. 531; 



203 



AWARD, 



2969 



native which finally determines matters, merely giving the party 
an option to perform his liabiHty in one of two ways, is valid."" 
But a hypothetical award, or alternative award, made dependent 
upon some future determination is bad/^ The judicial determi- 
nation of the matters involved must be completely made when 
award is made, and no part of this duty can be reserved by the 
arbitrators, or delegated, to be performed later.^^ But acts purely 
ministerial may be left to be done later." 

§ 2969. Completeness of the award. — The rule is that arbi- 
trators must decide all matters embraced in the submission which 
are brought before them by the parties, or not withdrawn from 
their consideration by the parties, or the award will be void for 
lack of completeness." But where the submission is general, the 
award need embrace only the matters brought before the arbitra- 
tors by the parties." Award of a particular thing to end all mat- 



Commonwealth V. Pejepscut, 7 Mass. 
399; Brown v. Davis, 2 Brev. (S. 
Car.) 468; Remelee v. Hall, 31 Vt. 
582, 76 Am. Dec. 140. 

°° McDonald v. Arnout, 14 111. 58; 
Hanson v. Webber, 40 Maine 194; 
Clement v. Comstock, 2 Mich. 359; 
Williams v. Williams, 11 Sm. & M. 
(Miss.) 393; Whitcher v. Whitcher, 
49 N. H. 176, 6 Am. Rep. 486; Thorn- 
ton V. Carson, 7 Cranch (U. S.) 596, 
3 L. ed. 451; Stanley v. Chappell, 8 
Cow. (N. Y.) 235. 

'^ Lell V. Hardesty, 13 Ky. L. 831 ; 
CoghiU V. Hord, 1 Dana (Ky.) 350, 
25 Am. Dec. 148; Lincoln v. Whitten- 
ton Mills, 12 Mete. (Mass.) 31; Con- 
nor V. Simpson, 104 Pa. St. 440; 
Carnochan v. Christie, 11 Wheat. (U. 
S.) 446, 6 L. ed. 516. 

"^McCrary v. Harrison, 36 Ala. 
577; Comer v. Thompson, 54 Ala. 
265; Archer v. Williamson, 2 Harr. 
& G (Md.) 62; Lincoln v. Whit- 
tenton Mills, 12 Mete. (Mass.) 31; 
Hoit V. Berger-Crittenden Co., 81 
Minn. 356, 84 N. W. 48; Rhodes v. 
Hardy, 53 Miss. 587; Davis v. Dyer, 
54 N. H. 146; Herbst v. Hagenaers, 
137 N. Y. 290, 33 N. E. 315; Spald- 
ing V. Irish, 4 Serg. & R. (Pa.) 322; 
Hooker v. Williamson, 60 Tex. 524. 
See cases cited in notes 54, 55, § 2952. 

°= Archer v. Williamson, 2 Harr. & 



G. (Md.) 62; Owen v. Boerum, 23 
Barb. (X. Y.) 187; Solomons v. Mc- 
Kinstry, 13 Johns. (N. Y.) 27. 

"White V. Arthur, 59 Cal. 33; 
Parkhurst v. Powers, 2 Root (Conn.) 
531; O'Bryan v. Reed, 2 Fla. 448; 
Steere v. Brownell, 113 111. 415; 
Amos V. Buck, 75 Iowa 651, 37 N. W. 
118; Clark v. Goit, 1 Kans. App. 345, 
41 Pac. 214; Burnam v. Burnam, 6 
Bush (Ky.) 389; Archer v. Will- 
iamson, 2 Harr. & G. (Md.) 62; 
Rollins V. Townsend, 118 Mass. 224; 
Tudor V. Scovell, 20 N. H. 171; 
Harker v. Hough, 7 N. J. L. 428; 
Jones V. Welwood, 71 N. Y. 208; 
Walker v. Walker, 60 N. Car. 255; 
Beh V. Poppleton, 11 Ore. 201, 3 Pac. 
27; Hamilton v. Hart, 125 Pa. St. 
142, 17 Atl. 426; Conger v. James, 
2 Swan (Tenn.) 213; Fortune v. 
KiUibrew, 86 Tex. 172, 23 S. W. 976; 
Kleine v. Catara, 2 Gall. (U. S.) 61, 
Fed. Cas. 7869; Smith v. Potter, 27 
Vt. 304, 65 Am. Dec. 198; Bean v. 
Bean, 25 W. Va. 604; Consolidated 
Water Power Co. v. Nash, 109 Wis. 
490, 85 N. W. 485. See cases cited in 
note 2, § 2966. 

"'Carsley v. Lindsay, 14 Cal. 390; 
Parmelee v. Allen, 32 Conn. 115 ; 
Sheffield v. Clark, 73 Ga. 92; Whet- 
stone V. Thomas, 25 111. 361 ; Hayes 
V. Forskoll, 31 Maine 112; Hodges 



§ 2970 



ARBITRATION AND AWARD. 



204 



ters in difference is sufficient if it concludes all matters/^ Under 
a general submission, a mere finding of a balance due from one 
party to the other is held a complete award, without showing 
how the balance was obtained/' Where the submission is of 
distinct enumerated matters, it is not necessary to specify each 
particular item in the award, if it appears that the whole matter 
was decided."* But if more than one separate matter was sub- 
mitted, and a general finding necessarily would not include all, 
then the award must show that all were passed upon.^^ An award 
which decides part of the matters, and expressly omits another 
within the scope of the submission is void.*" 

§ 2970. Consistency of award — Possibility of performance 
— Reasonableness— Entirety. — An award must be consistent, 
and there are cases holding awards invalid for repugnancy."^ 
The courts, if possible, will interpret an award so as to remove 
apparent inconsistency.*^ The oldest cases hold that an award 
to be valid must be reasonable,*" but now it seems that if no fraud 



V. Hodges, 9 Mass. 320; Whittemore 
V. Whittemore, 2 N. H. 26; New 
York &c. Lumber Co. v. Schneider, 
119 N. Y. 475, 24 N. E. 4; Walker 
V. Walker, 60 N. Car. 2SS ; Hewett 
V. Furman, 16 Serg. & R. (Pa.) 135. 
See also, Crabtree v. Green, 8 Ga. 
8; Tucker v. Page, 69 111. 179; 
Engleman's Exrs. v. Engleman, 1 
Dana (Ky.) 437; Tallman v. Tall- 
man, 5 Cush. (Mass.) 325; Young 
V. Kinney, 48 Vt. 22; Horrel v. Mc- 
Alexander, 3 Rand. (Va.) 94; Ten- 
nant v. Divine, 24 W. Va. 387. 

■* Hazen v. Addis, 14 N. J. L. 333 ; 
Smith V. Demarest, 8 N. J. L. 195. 

"" Brewer v. Bain, 60 Ala. 153 ; Gay- 
lord V. Gaylord, 4 Day (Conn.) 422; 
Stearns v. Cope, 109 111. 340; Harden 
V. Harden, 11 Gray (>.Iass.) 435; 
Sides V. Brendlinger, 14 Nebr. 491, 
17 N. W. 113; Gill v. Bickel, 10 Tex. 
Civ. App. 67, 30 S. W. 919; Bowman 
V. Downer, 28 Vt. 532; Bancroft v. 
Grover, 23 Wis. 463, 99 Am. Dec. 
195; Myers v. York &c. R. Co., 2 
Curt, (U. S.) 28, Fed. Cas. No. 9997, 
affd. 18 How. (U. S.) 246, IS L. ed. 
380. 

"'Whitworth V. Hulse, L. R. 1 
Exch. 251, 12 Jur. (N. S.) 652, 35 



L. J. Exch. 149, 14 L. T. R. (N. S.) 
445, 14 Wkly. R. 736; Hanson v. 
Webber, 40 Maine 194; Bigelow v. 
Maynard, 4 Cush, (Mass.) 317; 
Morewood v. Jewett, 25 N. Y. Super. 
Ct. 496, 

""Muldrow V, Xorris, 12 Cal, 331; 
Houston V. Pollard, 9 Mete. (Mass.) 
164; Bowman v. Downer, 28 Vt, 532; 
Bancroft v. Grover, 23 Wis. 463, 99 
.'\m. Dec, 195, 

°°Ott V. Schroeppel, 5 N. Y, 482; 
Wright v. Wright, 5 Cow. (N. Y.) 
197; Moore v, Cockroft, 11 N. Y. 
Super, Ct, 133, 

°'Ames v, Milward, 8 Taunt, 637, 
4 E. C. L, 312; Shaver v, Scott, 5 
U. C. Q, B, (O, S.) 575; Curd v. 
Wallace, 7' Dana (Ky.) 190, 32 Am. 
Dec. 85. 

"" Jones V, Powell, 6 Dowl. 483; 
Beaufort v. Welch, 10 Ad, & El. 527, 
37 E. C, L, 285; Grenfell v, Edg- 
come, 7 Q, B. 661, 53 E, C. L. 661; 
Cooper V. Langdon, 9 M, & W. 60, 

1 Dowl. (N. S.) 392; Cox v, Jagger, 

2 Cow, (N. Y.) 638, 14 Am, Dec. 
522. 

°'Lee V. Elkins, 12 Mod. 585; 
Bacon Abr,, Arb. E. 3, p. 337. 



205 AWARD. § 2971 

or corruption is shown, mere unreasonableness will not invalidate 
an award,^* It is said that an award must be possible of perform- 
ance, and if impossible from the nature of the thing directed, 
it is invalid, but if performance of a thing possible on the face 
of the award becomes subsequently impossible, because of some 
act of the party to perform, or of a stranger, the award is still 
valid."^ As a general rule, an award must be entire, that is made 
at one time, and successive partial awards are not permissible,"" 
unless authorized by the submission."^ An award conditioned 
on the court's deciding a question of law in a pending suit sub- 
mitted has been held good."* It may be that where awai'ds on 
several separate submissions are dependent, invalidity in one in- 
validates the others."" 

§2971. Partial invalidity of award. — The established rule 
is that an award good in part and bad in part will be sustained 
so far as good, if the good part is severable, that is, if the void 
parts are not necessary to the finality of the award, or if the void 
part is not the consideration of the thing to be done on the other 
side.'" Where the invalid part is so connected with the rest as 

'"Russell Awards (7th ed.), p. 308; Am. Dec. 313; Parraelee v. Allen, 32 

Waller v. King, 9 Mod. 63; Under- Conn. US; Richardson v. Payne, 55 

hill V. Van Cortlandt, 2 Johns. Ch. Ga. 167; Stearns v. Cope, 109 111. 340; 

(N. Y.) 339. Beeber v. Sevan, 80 Ind. 31; Lynch 

"Com. Dig., Arb, E. 12; Rolle v. Nugent, 80 Iowa 422, 46 N. W. 

Abr., Arb. E., p. 248; Bac. Abr., tit. 61; Adams' Admr. v. Ringo, 79 Ky. 

Arb., E. 4; Robertson v. Marshall, 217; Littlefield v. Waterhouse, 83 

155 N. Car. 167, 71 S. E. 67. IMaine 307, 22 Atl. 176; Garitee v. 

'"Gould V. Staffordshire Water- Carter, 16 Md. 309; Harrington v. 

works Co., 5 Exch. 214; Winter v Brown, 9 Allen (Mass.) 579; Bean 

Munton, 2 Moo. C. P. 723. See Ken- v. Macomber, 33 Mich. 127 ; Gibson 

drick V. Tarbell, 26 Vt. 416.' v. Powell, 5 Sm. & M. (Miss.) 712; 

■" Dowse V. Coxe, 3 Bing. 20, 11 E. Ellison v. Weathers, 78 Mo. 115; 

C. L. 20. See Cameron v. Castle- Doane College v. Lanham, 26 Nebr. 

berry 29 Ga. 495 ; Ott v. Schroeppel, 421, 42 N. W. 405 ; Whitcher v. 

S N Y. 482; Jones v. Welwood, 71 Whitcher, 49 N. H. 176, 6 Am. Rep. 

N. Y. 203. 486; Rogers v. Tatum, 25 N. J. L. 

"'Fuller V. Wheelock, 10 Pick. 281; Doke v. James, 4 N. Y. 568; 

(Mass.) 135; Waugh v. Mitchell, 21 Griffin v. Hadley, 53 N. Car. 82; 

N. Car. 510. Garrow v. Nicolai, 24 Ore. 76, 32 Pac. 

™ Cameron v. Castleberry, 29 Ga. 1036; South's Admrs. v. South, 70 

495 Pa. St. 195; Knight v. Holden, 104 

"Clark Millinery Co. v. Nat. N. Car, 107, 10 S. E. 90; Rounds v. 

Union F. Ins. Co. (N. Car.), 75 S, E. Aiken Mfg. Co., 58 S. Car. 299, 36 

944; Waisner v. Waisner, 15 Wyo. S. E. 714; Pearce v. Roller, 5 Lea 

420, 89 Pac. 580, 123 Am. St. 1081; (Tenn.) 485; Hartland v. Henry, 44 

Reynolds v. Reynolds, 15 Ala. 398; Vt. 593; Taylor's Admr. v. Nicol- 

Muldrow V. Norris, 2 Gal. 74, 56 son, 1 Hen. & M. (Va.) 67; Darling 



2971 



'ARBITRATION AND AWARD. 



206 



to be indivisible and as to affect the justice of tlie decision, the 
whole is bad.'^ An award in gross is indivisible,'^ and where im- 
proper items are included in a gross amount, the whole award 
is bad.'^ But where the items of which the gross award is made 
up are set out, it is severable as to its items.'* When the part 
which is invalid forms the consideration for the part in favor 
of the other party, which is valid, the award as a whole is in- 
valid.'^ An alternative award has been held valid as to the good 
part where one alternative is bad.'" Where one of several parts 
of an award against one party is bad, the other parts are usually 
held valid." An award merely void as to some persons not par- 
ties to the submission is good as to those who are parties.'* If 
there is a want of mutuality of remedy, the party who cannot 
enforce where the award operates in his favor cannot be held 



V. Darling, 16 Wis. 644; Lyle v. 
Rodgers, 5 Wheat. (U. S.) 394, 5 
L.ed. 117. 

'^ Tomlin V. Fordwich, 5 Ad. & El. 
147, 31 E. C. L. 306; White v. Arthur, 
59 Cal. 33; Philbrick v. Preble, 18 
Maine 255, 36 Am. Dec. 718 ; Bullock 
V. Bergman, 46 Md. 270 ; Shearer v. 
Handy, 22 Pick. (Mass.) 417; Chase 
V. Strain, IS N. H. S3S ; Brown v. 
Hankerson, 3 Cow. (N. Y.) 70. See 
also, Ehrman v. Stanfield, 80 Ala. 
118; Alfred v. Kankakee & S. W. R. 
Co., 92 111. 609; McCuUough v. Mc- 
CuUough, 12 Ind. 487; Hubbell v. 
Bissell, 13 Gray (Mass.) 298; Mather 
V. Day, 106 Mich. 371, 64 N. W. 198; 
Gibson v. Powell, S Sm. & M. 
(Miss.) 712; Ellison v. Weathers, 78 
Mo. 115; Chase v. Strain, 15 N. H. 
535; Leslie v. Leslie, 50 N. J. Eq. 
103, 24 Atl. 319; Bryant v. Fisher, 
85 N. Car. 69; Conger v. James, 2 
Swan (Tenn.) 213; Fortune v. Killi- 
brew, 86 Tex. 172, 23 S. W. 976; 
Lamphire v. Cowan, 39 Vt. 420. 

"Boynton v. Frye, 33 Maine 216; 
Chase v. Strain, IS N. H. 535; De 
Groot V. U. S., 5 Wall. (U. S.) 419, 
18 L. ed. 700. 

"Bullock V. Bergman, 46 Md. 270; 
Camp V. Sessions, 105 Mass. 236; 
Whitcher v. Whitcher, 49 N. H. 176, 



6 Am. Rep. 486; Dodds v. Hakes, 114 
N. Y. 260, 21 N. E. 398. 

"Shirley v. Shattuck, 4 Cush. 
(Mass.) 470; Chase v. Strain, IS N. 
H. 535 ; Dalrymple v. Whitingham, 26 
Vt. 345. See also, Colombia v. Cauca 
Co., 113 Fed. 1020, 51 C. C. A. 604. 

"Reynolds v. Reynolds, 15 Ala. 
398; Parraelee v. Allen, 32 Conn. 115; 
Brown v. Warnock, 5 Dana (Ky.) 
492; Boynton v. Frye, 33 Maine 216; 
Commonwealth v. Pejepscut, 7 Mass. 
399; Nichols v. Rensselaer County 
Mut. Ins. Co., 22 Wend. (N. Y.) 125; 
Lyle V. Rodgers, 5 Wheat. (U. S.) 
394, 5 L. ed. 117. 

"■McDonald v. Arnout, 14 111. 58; 
Clement v. Comstock, 2 Mich. 3S9; 
Stanley v. Chappell, 8 Cow. (N. Y.) 
235. See also, Wharton v. King, 2 
Barn. & Ad. 528, 22 E. C. L. 223. 

"Banks v. Adams, 23 Maine 259; 
Bouck V. Bouck, 57 Minn. 490, 59 
N. W. 547; Gibson v. Powell, 5 Sra. 
& M. (Miss.) 712; Hoagland v. 
Veghte, 23 N. J. L. 92; Osborne v. 
Calvert, 83 N. Car. 365; Barnet v. 
Gilson, 3 Serg. & R. (Pa.) 340; 
Darling v. Darling, 16 Wis. 644. 

"Sears v. Vincent, 8 Allen (Mass.) 
507; Mathews v. Mathews, 1 Heisk. 
(Tenn.) 669. 



207 AWARD. § 2972 

where it operates against him." This rule does not apply where 
he performs or offers to perform the void part.^" 

§ 2972. Correction and reformation of award. — Arbitra- 
tors have no general power to correct or alter an award after its 
making and delivery." Some cases permit the correction of cler- 
ical mistakes.*^ Alterations may be made at any time before final 
publication.^^ In a few cases, an unauthorized alteration by the 
arbitrators has been held like a spoliation by a stranger, not to 
invalidate the original award.^* A court of equity under its gen- 
eral powers to reform contracts to express the intent of the par- 
ties, may, it is held,, reform an award for mistake.^^ 

§ 2973. Recommitment of award. — As just stated, gen- 
erally arbitrators who have made and published their award be- 
come functi officii, and have no further power to correct or alter 
it, and usually, unless so provided by statute or submission, a 
court where it is sought to set aside or enforce an award may not 
order a recommitment.*" Yet it has been held that the court has 
the power to recommit when the submission was under a rule of 

"Brown V. Warnock, S Dana (Ky.) v. Corrothers, 26 W. Va. 238. See 

492; Littlefield v. Smith, 74 Maine cases cited in note 55, § 2952. 

387; Harrington v. Brown, 9 Allen *' Robinson-Rea Mfg. Co. v. Mel- 

(Mass.) 579; Gibson v. Powell, S Sm. Ion, 139 Pa. 257, 21 Atl. 91, 23 Am. 

& M. (Miss.) 712 ; McKeen v. Allen, 17 St, 186. 

N. J. L. 506; Brown v. Hankerson, "^ Fargo v. Reighard, 13 Ind. App. 

3 Cow. (N. Y.) 70; Pennington v 39, 39 N. E. 888, 41 N. E. 74; Bodge 

Bowman, 10 Watts (Pa.) 283. v. Hull, 59 Maine 225; Byars v. 

"° Galvin v. Thompson, 13 Maine Thompson, 12 Leigh. ( Va,) 550, 37 

367; Smith v. Sweeny, 35 N. Y. 291. Am. Dec. 680. 

'" Couch V. Harrison, 68 Ark. 580, "Henfree v. Bromley, 6 East 309; 

60 S. W. 957; Porter V. Scott, 7 Cal. Dudley v. Thomas, 23 Cal. 365; 

312; Bigler v. Sweitzer, 127 III. App. Rogers v. Corrothers, 26 W. Va. 238. 

14 ; Mand v. Patterson, 19 Ind. App. "^ Williams v. Warren, 21 111. 541 ; 

619, 49 N. E. 974; Lansdale v. Ken- Eisenraeyer v. Sauter, 11 111. 515; 

dall, 4 Dana (Ky.) 613; Woodbury v. Pulliam v. Pensoneau, ii 111. 375; 

Northy, 3 Greenl. (Maine) 85, 14 Sherfy v. Graham, 72 111. 158; Bouck 

Am. Dec. 214; Brown v. Durham, v. Wilber, 4 Johns. Ch. (N. Y.) 405; 

110 Mo. App. 424, 85 S. W. 120; Bissell v. Morgan, 56 Barb. (N. Y.) 

Aldrich V. Jessiman, 8 N. H. 516; 369. See McCord v. Flynn, 111 Wis. 

Flannery v. Sahagian, 134 N. Y. 85, 78, 86 N. W. 668. 

31 N. E. 319; Patton v. Baird, 42 «" Ward v. Dean, 3 Barn. & Ad. 234, 

N. Car. 255; Robinson-Rea Mfg. Co. 23 E. C. L. 110; Black v. Harper, 

V. Mellon, 139 Pa. St. 257, 21 Atl. dZ Ga. 752; Smith v. Smith, 28 111. 

91, 23 Am. St. 186; Butler v. Boyles, 56; Fitzgerald v. Fitzgerald, Hard. 

10 Humph. (Tenn.) 155, 51 Am. Dec. (Ky.) 227; Hopkins v. Sanford, 41 

697; Pollard v. Lumpkin, 6 Grat. Mich. 243, 2 N. W. 39; Brooke v. 

(Va.) 398, 52 Am. Dec. 128; Rogers Bannon, 3 Watts & S. (Pa.) 382. 



§ 2973 



ARBITRATION AND AWARD. 



208 



court in pending actions." In some cases statutes allow recom- 
mitment,^' in other cases recommitment has been allowed under 
the stipulations of the submission.'" An award may be recom- 
mitted only for cause sufficient to set it aside/" except that it 
may be recommitted for the discovery of new evidence, but not 
set aside on such ground."^ Recommitment is discretionary with 
the court,"" and may be refused even where an arbitrator is guilty 
of misconduct."' If the recommitment is merely to correct an error 
in form, a rehearing is unnecessary,"* but if for reconsideration 
upon the merits, the arbitrators must hear evidence if offered, 
and all should act as in the first hearing."^ They need not alter 
the award if convinced that it is correct."* Recommitment is 
usually held to extend the time for making the award."' The 
original powers of the arbitrators revive upon recommitment, 
unless specifically restricted."' 



^ Cumberland v. N. Yarmouth, 4 
Greenl. (Maine) 459; Boardman v. 
England, 6 Mass. 70 ; May v. Haven, 
9 Mass. 325 ; Yeaton v. Brown, 52 N. 
H. 14; Heslop v. Bush, 80 Pa. St. 
70; Fortune v. Killibrew (Tex,), 21 
S. W. 986, revd. 86 Tex, 172, 23 S, 
W. 976; Kleine v. Catara, 2 Gall. (U. 
S.) 61, Fed. Cas. No. 7869; Henley 
V. Menefee, 10 W, Va. 771. 

"" Cross V. Cross, 13 C. B. (N. S.) 
253, 106 E. C. L. 253 ; Brown v. Har- 
per, 54 Iowa 546, 6 N. W. 747 ; Blood 
V. Robinson, 1 Cush. (Mass.) 389; 
Johnston v. Paul, 22 Minn. 17; 
Gunn V. Bowers, 126 Pa. St. 552, 17 
Atl. 893. 

••Nickalls V. Warren, 6 Q. B. 615, 
51 E. C. L. 615, 9 Jur. 10; Lord v. 
Hawkins, 2 H. & N. 55 ; ; In re Powell, 
5 Ont. W. R. 49, 9 Ont. L. 236 ; Hodg- 
kinson V. Fernie, 3 C. B. (N. S.) 189, 
203, 91 E. C. L. 189-203, 

"Oldfield V, Price, 6 C. B. (N. S.) 
539, 95 E. C. L. 539; Harris v. Seal, 
23 Maine 435; Klingensmith v. West 
Leechburg Steel &c. Co., 17 Pa. 
Super, Ct. 210, 

"In re Keighley, L, R. (1893) 1 Q. 
B. 405 ; Depew v. Davis, 2 Greene 
(Iowa) 260. See Sanborn v. Davis, 5 
N. H. 389, 

^'Nickalls v. Warren, 2 Q. B. 615, 
51 E. C. L. 615 ; Walker v. Sanborn, 



8 Greenl. (Maine) 289; Harris v. 
Seal, 23 Maine 435; Rank v. Rank, 
21 Wkly. Notes Cas. (Pa.) 399; Et- 
ter V. Edwards, 4 Watts (Pa.) 63. 

"Brown v. Harper, 54 Iowa 546, 6 
N. W. 747; Shaw v. Pearce, 4 Binn. 
(Pa.) 485; Gunn v. Bowers, 126 Pa. 
St. 552, 17 Atl. 893. See Adams v. 
Adams, 8 N. H. 82 (where award 
was rendered invalid by conduct of 
party seeking recommitment, recom- 
mitment was refused). 

" Bird V. Penrice, 6 M. & W. 754 ; 
Morris v. Morris, 6 El. & Bl. 383, 88 
E. C. L. 383; Blood v. Robinson, 1 
Cush. (Mass.) 389. 

» Baker v. Hunter, 16 M. & W. 672 ; 
In re Manley, 2 Ont. Pr. 354; Cum- 
berland V. N. Yarmouth, 4 Greenl. 
(Maine) 459; Doherty v. Doherty, 
148 Mass. 367, 19 N. E. 352; Bowers 
V. Warrell, 1 Browne (Pa.) 212. 
Compare Peterson v. Loning, 1 
Greenl. (Maine) 64; Brann v. Vas- 
salboro, 50 Maine 64; and May v. 
Haven, 9 Mass. 325. 

'° May V. Haven, 9 Mass. 325, 

"Hickey v, Veazie, 59 Maine 282; 
Sperry v. Ricker, 4 Allen (Mass.) 17; 
Eastman v. Burleigh, 2 N. H. 484; 
Henley v. Menefee, 10 W. Va. 771, 

°* French v. Richardson, 5 Cush. 
(Mass.) 450. 



209 



AWARD. 



2974 



§ 2974. Ratification and repudiation of award. — A valid 
award need not be ratified by the parties."" Where an award 
is invalid, for reasons such as that the arbitrators exceeded their 
authority, did not give the parties a hearing, or failed to deter- 
mine all the matters submitted, the award is not absolutely void, 
but voidable only, and the parties may expressly or impliedly 
ratify it and make it valid.^ It is held that an award absolutely 
void under the statute cannot be ratified.^ A new consideration 
is not necessary to uphold the ratification of an invalid award. ^ A 
party cannot by his acts be held to ratify an award fatally defect- 
ive unless he knows of the defect.* An express promise, after pub- 
lication, to pay or perform a defective award, is a ratification.' 
Payments made in satisfaction of an invalid award cannot be 
recovered back, and they show such an intent to ratify that the 
party making payments cannot question its validity.* Giving a 
note for payment is ratification ;' so is the performance in whole 
or in part of acts required by the award.^ Likewise, the accept- 



°° Sears v. Vincent, 8 Allen (Mass.) 
507; Aspley v. Thomas, 17 Tex. 220; 
Akely v. Akely, 16 Vt. 450. 

'Reynolds v. Roebuck, 37 Ala. 408; 
Perry v. Mulligan, 58 Ga. 479; State 
V. Gurnee, 14 Kans. 111;^ Burrows v. 
Guthrie, 61 111. 70; Stipp v. Washing- 
ton-Hall Co., 5 Blackf. (Ind.) 473; 
McCullough V. Myers, Hard. (Ky.) 
206; Peniston v. Somers, 15 La. Ann. 
679; Culver v. Ashley, 19 Pick. 
(Mass.) 300; Williams v. Williams, 
11 Sm. & M. (Miss.) 393; Phillips v. 
Couch, 66 Mo. 219 ; Ellison v. 
Weathers, 78 Mo. 115; Furber v. 
Chamberlain, 29 N. H. 405; Cross v. 
Cross, 17 N. J. Eq. 288; Gidley v. 
Gidley, 65 N. Y. 169; Sharpe v. King, 
38 N. Car. 402; Belt v. Poppleton, 11 
Ore. 201, 3 Pac. 27. For specific men- 
tion of various defects in awards, 
which have been held cured by ratifi- 
cation, see 3 Cyc. 718-721. 

'Hubbell V. Bissell, 13 Gray 
(Mass.) 298; Burkland v. Johnson, 50 
Nebr. 858, 70 N. W. 388; Wiles v. 
Peck, 26 N. Y. 42. 

'Ellison V. Weathers, 78 Mo. 115. 

* Darnley v. London, Chatham & 
Dover R. Co., L. R. 2 H. L. 43, 36 
L. J. Ch. 404, 16 L. T. R. (N. S.) 
217, 15 Wkly. Rep. 817; Payne v. 

14 — Contracts, Vol. 4 



Moore, 2 Bibb (Ky.) 163, 4 Am. 
Dec. 689; Patton v. Garrett, 116 N. 
Car. 847, 21 S. E. 679; Sharpe v. 
King, 38 N. Car. 402. But ignorance 
of legal effect of act of ratification 
will not allow repudiation of it. Ty- 
ler V. Stevens, 7 Ga. 278. 

"Godfrey v. Knodle, 44 111. App. 
638; McCullough v. Myers' Exrs., 
Hardin (Ky.) 197; Lattier v. Ra- 
chal, 12 La. Ann. 695; Williams v. 
Williams, 11 Sm. & M. (Miss.) 393; 
Belt V. Poppleton, 11 Ore. 201, 3 
Pac. 27; Sargeant v. Butts, 21 Vt. 99. 

"Reynolds v. Roebuck, 37 Ala. 408; 
Willingham v. Harrell, 36 Ala. 583; 
Wilson v. Wilson, 18 Colo. 615, 34 
Pac. 175 ; Bulkley v. Stewart, 1 Day 
(Conn.) 130, 2 Am. Dec. 57; Barnaby 
V. Barnaby, 1 Pick. (Mass.) 221; 
Burbank v. Norris, Smith (N. H.) 
440; Males v. Lowenstein, 10 Ohio 
St. 512. 

'Forqueron v. Van Meter, 9 Ind. 
270; Miller v. Brumbaugh, 7 Kans. 
343; Page v. Pendergast, 2 N. H. 
223; Patton v. Garrett, 116 N. Car. 
847,21 S. E. 679. 

' Hamlin v. Norwich, 40 Conn. 13 ; 
Howard v. Pensacola &c. R. Co., 24 
Fla. 560, 5 So. 356; Rich v. Turnbull, 
95 Ga. 752, 22 S. E. 581; Cobb v. 



8 2975 



'ARBITRATION AND AWARD. 



2IO 



ance of the performance by the other party of things directed by 
the award to be done by him is ratification, estopping the party 
accepting from setting up the invahdity of the award." Suing on 
an award is a ratification of its validity,^" or pleading it in bar/^ 
or participation in any proceedings referring to the award, in- 
consistent with the intent to disaffirm. ^^ Mere lapse of time may 
work a ratification.^^ By mutual consent of the parties, an award 
may be repudiated,^* and repudiation of the award is the result 
of a subsequent agreement to recommit,^' even though the recom- 
mitment does not produce a valid award. ^^ 

§ 2975. Construction of award. — Awards are now favored 
by the courts,^' though in early times they were disposed to be 
jealous of them. It is now a well settled rule that awards will 



Parham, 4 La. Ann. 148; Bentley v. 
Davis, 21 Nebr. 685, 33 N. W. 473; 
Currier v. Basset, Smith (X. H.) 
191 ; Leslie v. Leslie, SO N. J. Eq. 155, 
24 Atl. 1029; Terry v. Moore, 3 Misc. 
(X. Y.) 285, 22 N. Y. S. 785; Cham- 
bers V. j\IcKee, 42 Wkly. Notes Cas. 
(Pa.) 90, 39 Atl. 822; Betsill v. Bet- 
sill, 30 S. Car. 505, 9 S. E. 652. See 
also, Kennard v. Harris, 2 Barn. & 
Cr. 801, 4 D. & R. 272, 9 E. C. L. 346. 

"Hoogs V. Morse, 31 Cal. 128; 
Brown v. Wheeler, 17 Conn. 345, 44 
Am. Dec. 550; Pike v. Stallings, 71 
Ga. 860; Grimmett v. Smith, 44 111. 
App. 638; Thornton v. McCormick, 75 
Iowa 285, 39 N. W. 502; Hegan v. 
Beckley, 32 Ky. L. 349, 105 S. W. 969; 
Cobb V. Parham, 4 La. Ann. 148; Sis- 
son V. Baltimore, 51 Md. 83 ; Culver 
V. Ashlev, 19 Pick. (Mass.) 300; Tav- 
lor V. Smith, 93 Mich. 160, 52 N. W. 
1118: Furber v. Chamberlain, 29 N. 
H. 405 ; Viele v. Troy & B. R. Co., 21 
Barb. (N. Y.) 381, affd. 20 N. Y. 
184; Johnson v. Stalcup, 4 Baxt. 
(Tenn.) 283; Tavlor v. St. Johnsbury 
& L. C. R. Co., 57 Vt. 106. See also, 
Frick v. Christian County. 1 Fed. 250. 

"Anderson v. Miller. 108 Ala. 171, 
19 So. 302; Davis v. Berger, 54 Mich. 
652, 20 N. W. 629; McDaniel v. Bell, 
3 Hayw. (Tenn.) 257. 

"Ogden V. Rowley, IS Ind. 56; 
Stipp V. Washington-Hall. Co., 5 
Blackf. (Ind.) 473. 

''Hoogs V. Morse. 31 Cal. 128; 
Burrows v. Guthrie, 61 111. 70; Dun- 



can V. Fletcher, 1 Beecher's Breese 
(,111.) 323. 

" Kane County v. Herrington, 50 
III. 232; Barker v. Belknap's Estate, 
27 Vt. 700: Jones v. Phenix Bank, 
8 X. Y. 228. See also, iSlackenzie v. 
Brodie, 1 Xova Scotia Dec. 243. 

" See Hynes v. Wright, 62 Conn. 
323, 26 Atl. 642, 36 Am. St. 344; Ed- 
wards V. Hartshorn, 72 Kans. 19, 82 
Pac. 520, 1 L. R. A. (N. S.) 1050. 
See also, Blanton v. Littell, 65 Ark. 
76, 44 S. W. 716 ; Newlan v. Lombard 
L'niversity, 62 111. 195 ; Eastman v. 
Armstrong, 26 III. 216; Marshall v. 
Piles, 3 Bush (Ky.) 249; RoUins v. 
Townsend, 118 )ilass. 224; Georges v. 
Xiess. 70 ilinn. 248, 73 X. W. 644. 
But see Hynes v. Wright, 62 Conn. 
323, 26 Atl.'642, 36 Am. St. 344 ; Ham- 
ilton V. Hart, 125 Pa. St. 142, 17 Atl. 
226, 473 ; and Simplot v. Simplot, 14 
Iowa 449. 

'" Blanton v. Littell, 65 Ark. 76, 44 
S. W. 716; Rawlinson v. Shaw, 117 
Mich. 5, 75 N. W. 138. For ratifica- 
tion of invalid resubmission see 
O'Brvan v. Reed, 2 Fla. 448; Sisson 
V. Baltimore, 51 Md. 83. 

"Pavne v. Crawford, 102 Ala. 387, 
14 So. 854; Shafer v. Shafer, 6 Md. 
518; Rollins v, Townsend, 118 JMass. 
224; Hewitt v. Lehigh &c. R. Co,, 57 
N, J. Eq. 511. 42 .Atl. 325 

"Brush v. Fisher, 70 Mich. 469, 38 
N. W. 446, 14 Am. St. 510; Hill v. 
Walker (Tex. Civ. App.), 140 S. W. 
1159; Sasseen v. Weakley, 34 Ga. 560; 



211 



AWARD. 



2976 



be construed liberally/' and every reasonable presumption and 
intendment is made in favor of their validity.'^' Questions relat- 
ing to the authority of arbitrators and conformity with the sub- 
mission, as well as the construction of the award itself, will be 
decided according to the terms of the submission and award, and 
all the facts and circumstances of the transaction.^" Awards are, 
however, to be construed reasonably and sensibly." It is held 
that when an award is in writing, its construction is for the 
court.^^ 

§ 2976. Parol evidence to vary or explain an award — Arbi- 
trators as witnesses. — The general rule is that parol evidence 



Allen V. Hiller, 8 Ind. 310; Snyder v. 
Rouse, 1 Mete. (Ky.) 625; Roberts 
V. Consumers' Can Co., 102 Md. 362, 
62 Atl. 585, 111 Am. St. 377; Port 
Huron &c. R. Co. v. Callanan, 61 
Mich. 22, 34 N. W. 678; Tucker v. 
Allen, 47 Mo. 488; Tracy v. Herrick, 
25 N. H. 381; Herrick v. Blair, 1 
Johns. Ch. (N. Y.) 101; Gonsales v. 
Deavens, 2 Yeates (Pa.) 539; Green 
V. Franklin, 1 Tex. 497. See also, In 
re Templeman, 9 Dowl. 962 ; Hawk- 
ins V. Colclough, 1 Burr. 274; Bur- 
chell V. Marsh, 17 How. (U. S.) 344, 
15 L. ed. 96. 

"Burns v. Hendrix, 54 Ala. 78; 
Fooks V. Lawson, 1 Marv. (Del.) 
lis, 40 Atl. 661, 1 Hard. (Del.) 115; 
King V. Cook, T. U. P. Charlt. (Ga.) 
286, 4 Am. Dec. 715; McMillan v. 
James, 105 111. 194; Hanson v. Web- 
ber, 40 Maine 194; Roloson v. Car- 
son, 8 Md. 208; Shurtleff v. Parker, 
138 Mass. 86; Hoit v. Berger-Crit- 
tenden Co., 81 Minn. 356, 84 N. W. 
48; Bush v. Davis, 34 Mich. 190; 
Bentley v. Davis, 21 Nebr. 685, 33 
N. W. 473 ; Ford v. Burleigh, 60 N. 
H. 278; Rogers v. Tatum, 25 N. J. L. 
281 ; Hiscock v. Harris, 74 N. Y. 108; 
Osborne v. Calvert, 83 N. Car. 365; 
Gonsales v. Deavens, 2 Yeates (Pa.) 
539; Green v. Franklin, 1 Tex. 497; 
James v. Thurston, 1 Cliff. (U. S.) 
367, Fed. Cas. No. 7186 ; Kendrick v. 
Tarbell, 26 Vt. 416: Fluharty v. Beat- 
ty, 22 W. Va. 698; Armstrong v. 
Armstrong, 1 Leigh (Va.) 491 ; Ban- 
croft V. Grover, 23 Wis. 463, 99 Am. 
Dec. 195. 



'°See Elliott Ev., § 1655; Roberts 
V. Consumers' Can Co., 102 Md. 362, 
62 Atl. 585, 111 Am. St. Zll ; Brush 
V. Fisher, 70 Mich. 469, 38 N. W. 446, 
14 Am. St. 510. See also, Blood v. 
Shine, 2 Fla. 127; Merritt v. Mer- 
ritt, 11 111. 565; Garitee v. Carter, 16 
Md. 309; Strong v. Strong, 9 Cush. 
(Mass.) 560; Parsons v. Aldrich, 6 
N. H. 264; Kaplan v. Niagara F. Ins. 
Co., n N. J. L. 780, 65 Atl. 188; New 
York Lumber & Woodworking Co. v. 
Schnieder, 119 N. Y. 475, 24 N. E. 4; 
Carter v. Sams, 20 N. Car. 321 ; Green 
V. Franklin, 1 Tex. 497; Richards v. 
Smith, i'i Utah 8, 91 Pac. 683 ; Lamp- 
hire V. Cowan, 39 Vt. 420; Richards 
v. Brockenbrough, 1 Rand. (Va.) 
449; Eureka Pipe Line &c. Co. v. 
Simms, 62 W. Va. 628, 59 S. E. 618. 
See Barnard v. Lancashire Ins. Co., 
101 Fed. 36, 41 C. C. A. 170 ; Wood v. 
Treleven, 74 Wis. 577, 43 N. W. 488. 

°°King V. Fountain Water Co., 75 
Conn. 621, 55 Atl. 10; Seaton v. Ken- 
dall, 61 111. App. 289, affg. 171 111. 
410, 49 N. E. 561 ; Kanouse v. Kan- 
ouse, 36 111. 439; Williams v. War- 
ren, 21 111. 541; Gordon v. Tucker, 
6 Greenl. (Maine) 247; Walsh v. 
Gilmor, 3 Har. & J. (Md.) 383, 6 
Am. Dec. 502; Masury v. Whiton. Ill 
N. Y. 679, 18 N. E. 638; McBride v. 
Hagan, 1 Wend. (N. Y.) 326. 

^ Stonehewer v. Farrar, 9 Jur. 203 ; 
Gordon v. Saxonville Mills, 14 Allen 
(Mass.) 219. 

""^ Mulligan v. Perry, 64 Ga. 567. 
Compare King v. Cook, T. U. P. 
Charlt. (Ga.) 286, 4 Am. Dec. 715. 



2976 



ARBITRATION AND AWARD. 



212 



is not admissible to vary or control the terms of an unambiguous 
written award, not attacked upon a ground for which awards are 
set aside. ^^ The award itself is the best evidence of its meaning. 
Nor is parol evidence admissible to explain the intention of parties 
who entered into a submission plain on its face.^* 

But, in certain cases, it has been held that parol evidence is 
admissible to show what took place before the arbitrators, and 
where an award is attacked on account of extrinsic matter which 
would avoid it, the facts may be shown by parol. ^^ Parol evidence 
is admissible to sustain the award as to facts about which it is si- 
lent, so long as such evidence does not contradict or vary its 
terms. ^^ It is always admissible to show the award void, as by 
showing that the arbitrators considered matters not submitted, or 
that no final award was made.^' And if it is not certainly apparent 
from the submission and award, parol evidence is permissible to 
show what matters were submitted and decided.^* Of course, the 



"" Elliott Evidence, § 1664; Scott v. 
Green, 89 N. Car. 278 ; May v. Miller, 
59 Vt. 577, 7 Atl. 818; Kingston v. 
Kincaid, 1 Wash. C. C. (U. S.) 448, 
Fed. Cas. No. 7821. See also, Collier 
V. White, 97 Ala. 615, 12 So. 385; 
Mulligan V. Perry, 64 Ga. 567; 
Schmidt V. Glade, 126 111. 485, 18 N. 
E. 762; Comer}^ v. Howard, 81 Maine 
421, 17 Atl. 318; Evans v. Clapp, 123 
Mass. 165, 25 Am. Rep. 52; Aldrich 
V. Jessiman, 8 N. H. 516; Doke v. 
James, 4 N. Y. 568; Clark Millinery 
Co. V. Nat. Union Fire Ins. Co. (N. 
Car.-), 75 S. E. 944. 

=^Furber v. Chamberlain, 29 N. H. 
405; Leslie v. Leslie, 50 N. J. Eq. 155, 
24 Atl. 1029; Cobb v. Dolphin Mfg. 
Co., 108 N. Y. 463, IS N. E. 438; 
Sessions v. Barfield, 2 Bay (S. Car.) 
94. 

^Elliott Evidence, § 1664; Bridge- 
port v. Eisenman, 47 Conn. 34; Evans 
V. Clapp, 123 ]Mass. 165, 25 Am. Rep. 
52. 

^ Riley V. Hicks, 81 Ga. 265, 7 S. 
E. 173; Stojie v. Atwood, 28 111. 30; 
Young v. Dugan, 1 Greene (Iowa) 
152; Porter v. Dugat, 12 Mart. (La.) 
245; Woodbury v. Northy, 3 Maine 



85, 14 Am. Dec. 214; Robertson v. 
McNiel, 12 Wend. (N. Y.) 578; 
Schultz v. Halsey, 3 Sandf. (N. Y.) 
405. 

''Elliott Evidence, § 1664;; Thomp- 
son V. Blanchard, 2 Iowa 44; Shulte 
& Wagner v. Hennessy, 40 Iowa 352 ; 
Wyman v. Hammond, 55 Maine 534; 
Witz V. Tregallas, 82 Md. 351, 33 
Atl. 718; Strong v. Strong, 9 Gush. 
(!\Iass.) 560; Huntsman v. Nichols, 
116 Mass, 521; Hinkle v. Harris, 34 
i\Io. App. 223 ; Hall v. Vanier, 6 Nebr. 
85; Dodds v. Hakes, 114 N. Y. 260, 
21 X. E. 398; Walker v. Walker, 60 
N. Car. 255. 

"'Bennett v. Pierce, 28 Conn. 315; 
Abel V. Fitch, 20 Conn. 90; Stevens 
V. Gray, 2 Harr. (Del.) 347; Riley 
V. Hicks, 81 Ga. 265, 7 S. E. 173; 
Dice V. Yarnel, Morr. (Iowa) 241; 
Shackelford v, Purket, 2 A. K. Marsh. 
(Ky.) 435, 12 Am. Dec. 422; Jackson 
V. Hoffman, 31 La. Ann. 97 ; Ham- 
mond V. Deehan, 78 Maine 399, 6 Atl. 
3 ; Evans v. Clapp, 123 Mass. 165, 25 
Am. Rep. 52 Morss v. Osborn, 64 
Barb. (N. Y.) 543; Osborne v. Cal- 
vert, 86 N. Car. 170; Converse v. Col- 
ton, 49 Pa. St. 346. 



213 



AWARD.. 



§ 2976 



contents of an oral submission/" or oral award/" may be shown by 
parol. Where a general submission is held to include only the mat- 
ters actually presented, it may be shown by parol what these mat- 
ters were."^ The testimony of arbitrators is admissible generally, 
where other parol evidence is received as to matters connected 
with the arbitration, except to show fraud or misconduct.''^ They 
may testify to sustain the award,^" or prove a mistake,"* to 
show the award void,"° or to show what matters were decided."* 
An arbitrator may not testify to his own fraud or misconduct,"^ 
though it is held that one who refused to join in the award may 
testify as to the misconduct of others."* If the award is proper 
on its face, all reasonable presumptions are indulged in its favor."° 
The party attacking has the burden of proof." 



=° Elliott Evidence, § 1664; Black- 
well V. Goss, 116 Mass. 394; Tucker 
V. Gordon, 7 How. (Miss.) 306; Tor- 
rence v. Graham, 18 N. Car. 284; 
Hall V. Mott, Brayt. (Vt.) 81. 

=° Elliott Evidence, § 1664; Cady v. 
Walker, 62 Mich. 157, 28 N. W. 805, 
4 Am. St. 834 ; Boughton v. Seamans, 
9 Hun (N. Y.) 392. 

=" Bennett v. Pierce, 28 Conn. 315; 
Shackelford v. Purket, 2 A. K. Marsh. 
(Ky.) 435, 12 Am. Dec. 422;_Mt. Des- 
ert V. Tremont, 75 Maine 252; 
Hodges v. Hodges, 5 Mete. (Mass.) 
205 ; Cheshire Bank v. Robinson, 2 N. 
H. 126 ; Walker v. Walker, 60 N. Car. 
255; Dickerson v. Rorke, 30 Pa. St. 
390. See cases cited in note 51, 
§ 2977. 

''Spurck V. Crook, 19 111. 415; 
Thompson v. Blanchard, 2 Iowa 44; 
Evans v. Clapp, 123 Mass. 165, 25 Am. 
Rep. 52 ; Graham v. Graham, 9 Pa. St. 
254, 49 Am. Dec. 557. 

=" Elliott Evidence, § 1664; Stone 
v. Atwood, 28 111. 30; Robinson v. 
Shanks, 118 Ind. 125, 20 N. E. 713; 
Young v. Dugan, 1 Greene (Iowa) 
152; Woodbury v. Northy, 3 Maine 
85, 14 Am. Dec. 214; Robertson v. 
McNiel, 12 Wend. (N. Y.) 578. 

■"King V. Armstrong, 25 Ga. 264; 
Pulliam V. Pensoneau, 33 III. 375 ; 
Barrows v. Sweet, 143 Mass. 316, 9 
N. E. 665; Roop v. Brubacker, 1 
Rawle (Pa.) 304. 

" Shulte v. Hennessy, 40 Iowa 352 ; 
Huntsman v. Nichols, 116 Mass. 521; 
Hall V. Vanier, 6 Nebr. 85; Dodds v. 



Hakes, 114 N. Y. 260, 21 N. E. 398. 

""Elhott Ev., § 1664; Abel v. Fitch, 
20 Conn. 90 ; Stevens v. Gray, 2 Har. 
(Del.) 347; Hammond v. Deehan, 78 
Maine 399, 6 Atl. 3 ; Hale v. Huse, 10 
Gray (Mass.) 99; New York v. But- 
ler, 1 Barb. (N. Y.) 325, affd. 4 How 
Pr. (N. Y.) 446; Osborne v. Calvert, 
83 N. Car. 365; Converse v. Colton 
49 Pa. St. 346. 

"'Overby v. Thrasher, 47 Ga. 10 
Tucker v. Page, 69 111. 179; Bigelow 
v. Maynard, 4 Gush. (Mass.) 317 
Ellison V. Weathers, 78 Mo. 115; Ell- 
maker v. Buckley, 16 Serg. & R. 
(Pa.) 72. 

^Levine v. Lancashire Ins. Co., 66 
Minn. 138, 68 N. W. 855; National 
Bank of Republic v. Darragh, 30 Hun 
(N. Y.) 29, affd. 93 N. Y. 655. 

^ See Elliott Evidence, § 1655 ; Hall 
V. Merriraan, 1 Root (Conn.) 197; 
Haywood v. Harmon, 17 111. 477; 
Leonard v. Root, 15 Gray (Mass.) 
553 ; Brush v. Fisher, 70 Mich. 469, 38 
N. W. 446, 14 Am. St. 510; Mosness 
V. German American Ins. Co., 50 
Minn. 341, 52 N. W. 932 ; Upshaw v. 
Hargrove, 6 Sm. & M. (Miss.) 286; 
Locke v. Filley, 14 Hun (N. Y.) 139; 
Reedy v. Scott, 23 Wall. (U. S.) 352, 
23 L. ed. 109. 

"Hardin v. Almand, 64 Ga, 582; 
Gorham v. Millard, 50 Iowa 554 ; New 
Orleans Elevator (jo. v. New Orleans, 
47 La. Ann. 1351, 17 So. 860; Witz 
v. Tregallas, 82 Md. 351, 33 Atl. 
718; Roberts v. Old Colony R. Co.. 
123 Mass. 552; Brush v. Fisher, 70 



2977 



ARBITRATION AND AWARD. 



214 



§ 2977. Conclusiveness of award when unimpeached, and 
effect upon cause of action. — The general rule is that an 
award regular upon its face is final and conclusive between the 
parties when unimpeached, and is as binding upon them as a judg- 
ment of a court of last resort, being, in fact, an adjudication by 
a court of the parties' own choosing, and courts cannot inquire 
into it as to whether rightly or wrongly decided.*^ Statutes in 
certain jurisdictions give courts power to review awards upon 
specified grounds, but the scope of these statutes is not extended 
beyond their plain meaning/" In general, an award merges and 



Mich. 469, 38 N. W. 446, 14 Am. St. 
510; Birkbeck v. Burrows, 2 N. Y. 
Super. Ct. 63 ; Liverpool &c. Ins. Co. 
V. Goehring, 99 Pa. St. 13; Harde- 
man V. Burge, 10 Yerg. (Tenn.) 239. 
" Clerks' Benev. Union v. Knights 
of Columbus, 70 S. Car. 543, SO S. E. 
206; Graham v. Bales (Tenn. Ch.), 
45 S. W. 465 ; Jones v. Frosh, 6 Tex. 
202; Jensen v. Deep Creek Farm & 
Live Stock Co., 27 Utah 66, 74 Pac. 
427; Learned v. Bellows, 8 Vt. 79; 
.Miller V. Miller, 99 Va. 125, il S. E. 
792 ; Skagit County v. Trowbridge, 
25 Wash. 140, 64 Pac. 901 ; Billmyer 
V. Hamburg-Bremen Fire Ins. Co., 57 
W. Va. 42, 49 S. E. 901 ; Eau Claire 
V. Eau Claire Water Co., 137 Wis. 
517, 119 X. W. 555. See also, Greene 
V. Darling, 1 Mason (U. S.) 201, 
Fed. Cas. No. 5765; Segal v. Fred, 
105 Minn. 126, 117 N. W. 225; Jen- 
kins V. Meagher, 46 Miss. 84; Dav- 
enport V. Fulkerson, 70 Mo. 417; 
Tynan v. Tate, 3 Nebr. 388; Straw 
V. Truesdale, 59 N. H. 109; Johnson 
V. Noble, 13 N. H. 286, 38 Am. Dec. 
485 ; Richardson v. Lanning, 26 N. J. 
L. 130; Sweet v. Morrison, 116 N. Y. 
19, 22 N. E. 276, IS Am. St. 376; 
Mayberry v. Mayberry, 121 N. Car. 
248, 28 S. E. 349 ; Corrigan v. Rocke- 
feller, 67 Ohio St. 354, 66 N. E. 95; 
Merrick's Estate, 5 \\'atts. & S. (Pa.) 
9; Harris v. Social Mfg. Co., 8 R. L 
133, S Am. Rep. 549. See Spencer v. 
Curtis, 57 Ind. 221 ; Conger v. Dean, 
3 Iowa 463, 66 Am. Dec. 93; Miller 
v. Brumbaugh, 7 Kans. 343 ; Shackel- 
ford v. Purket, 2 A. K. lilarsh. (Ky.) 
435, 12 Am, Dec. 422; Amet v. Boyer, 
36 La. Ann. 266; In re Wallace, 31 
La. Ann. 335 ; Deane v. Coffin, 17 
Maine 52; Frison v. De Peififer, 83 



j\Iaine 71, 21 Atl. 746; Roberts v. 
Consumers' Can Co., 102 Md. 362, 62 
Atl. 58S, 111 Am. St. ill; Cook v. 
Gardner, 130 Mass. 313; Evans v. 
Clapp, 123 Mass. 165, 25 Am. Rep. 
52 ; Beam v. Macomber, ZZ Mich. 127, 
and Edmundson v. Wilson, 108 Ala. 
118, 19 So. 367; Wilbourn v. Hurt, 
139 Ala. 557, 36 So. 768; Harris v. 
Hanie, Zl Ark. 348; Peachy v. 
Ritchie, 4 Cal. 205; Fulmore v. Mc- 
George, 91 Cal. 611, 28 Pac. 92; Wil- 
son V. Wilson, 18 Colo. 615, 34 Pac. 
17S; Curley v. Dean, 4 Conn. 259, 10 
Am. Dec. 140; In re Curtis, 64 Conn. 
501, 30 Atl. 769, 42 Am. St. 200; 
Stewart v. Grier, 7 Houst. (Del.) 
378, Zl Atl. 328 ; Sanborn v. Maxwell, 
18 App. Cas, (D. C.) 245; Sheffield 
V. Clark, 1Z Ga. 92; Schmidt v. Glade, 
126 111. 485, 18 N. E. 762. See also, 
Hynes v. Wright, 62 Conn. 323, 26 
Atl. 642, 36 Am. St. 344; In re Cur- 
tis, 64 Conn. 501, 30 Atl. 769, 42 Am. 
St. 200; Williams v. Branning Mfg. 
Co., 153 N. Car. 7, 68 S. E. 902, 138 
Am. St. dZl , and see note 138 Am. 
St. 643, 644; Hunt v. United States, 
45 Ct. CI, (U. S.) 566; Bowden v. 
Crow, 2 Tex. Civ. App. 591, 21 S. W. 
612; McCord v. Flynn, 111 Wis. 78, 
86 N. W. 668. 

"Edmundson v. Wilson, 108 Ala. 
118, 19 So. 367; Carsley v. Lindsay, 
14 Cal. 390; Stewart v. Grier, 7 
Houst. (Del.) 378, 32 Atl, 328; An- 
derson V, Taylor, 41 Ga. 10 ; Def ord 
V. Deford, 116 Ind. 523, 19 N. E. 530; 
Weir V. West, 27 Kans. 650; Wrig- 
glesworth v. Morton, 2 Bibb (Kv.) 
157; Amet v. Boyer, 36 La. Ann. 266; 
Brigham v. B'urnham, 12 Allen 
(Mass.) 97; Jenkins v. Meager, 46 
Miss. 84: Bell v. Price, 21 N. J. L. 32; 



215 



AWARD. 



§ 2977 



extinguishes all claims included in the submission, and bars an 
action on the original demand/^ In an action on an award, mat- 
ters embraced therein cannot be set up in defense/* A parol 
submission merges a cause of action in an award as completely 
as a submission in writing.*^ An award does not merge and bar 
any matters except those included within the scope of the sub- 
mission,*" and where a party can show that a matter was not 
within the submission, though existing at the time of submission, 
the award is no bar.*' Where merely the amount of liability on 
a mortgage or insurance contract is submitted, the award does 
not bar a suit on the original mortgage or policy.*' Where the 
submission is general, it is held in England and Canada,*" and 



Smith V. Cutler, 10 Wend. (N. Y.) 
589, 25 Am. Dec. 580. 

" Callier v. Watley, 120 Ala. 38, 23 
So. 796; Lilley v. Tuttle (Colo.), 117 
Pac. 896; McClelland v. Hammond, 
12 Colo. App. 82, 54 Pac. 538 ; Curley 
V. Dean, 4 Conn. 259, 10 Am. Dec. 
140; Rogers v. Holden, 13 111. 293; 
Bakes V. Bass Foundry & Machine 
Works, 129 Ind. 185, 28 N. E. 319; 
West V. Averill Grocery Co., 109 
Iowa 488, 80 N. W. 555 ; Trevis's Exr. 
V. Trevis's Exrs., 4 T. B. Mon. (Ky.) 
46; Carter v. Shibles, 74 Maine 273; 
Sears v. Vincent, 8 Allen (Mass.) 
507; Jones v. Harris, 58 Miss. 293; 
Searles v. Lum, 8i Mo. App. 607; 
Bentley v. Davis, 21 Nebr. 685, 33 N. 
W. 473; Burleigh v. Ford, 59 N. H. 
536; New York Lumber &c. Co. v. 
Schnieder, 119 N. Y. 475, 24 N. E. 4; 
Muirhead v. Kirkpatrick, 2 Pa. St. 
425 ; Colcock v. Wainwright, 1 Bay. 
(S. Car.) 114; Hildebran v. Rowan, 

11 Humph. (Tenn.) 92; Hall v. Mor- 
ris, 30 Tex. 280; Lunsford v. Smith, 

12 Grat. (Va.) 554; Preston v. Whit- 
comb, 11 Vt. 47; Tennant v. Divine, 
24 W. Va. 387. 

" Eaton V. Burns, 31 Ind. 390 ; Garr 
V. Gomez, 9 Wend. (N. Y.) 649; 
Johnson v. Worden, 47 Vt. 457; West 
V. Averill Grocery Co., 109 Iowa 488, 
80 N. W. 555. 

« Randall v. Glenn, 2 Gill (Md.) 
430; Searles v. Lum, 81 Mo. App. 
607; Jessiman v. Haverhill &c. Iron 
Manufactory, 1 N. H. 68; Armstrong 
V. Hasten, 11 Johns. (N. Y.) 189; 
Aspley V. Thomas, 17 Tex. 220. 

" Callier v. Watley, 120 Ala. 38, 23 



So. 796; Abel v. Fitch, 20 Conn. 90; 
Brady v. Pryor, 69 Ga. 691; Wood- 
ward V. Woodward, 14 111. 370; 
Walsh v. Gilmor, 3 Harr. & J. (Md.) 
383, 6 Am. Dec. 503; Munn v. Reed, 
4 Allen (Mass.) 431; Squires v. An- 
derson, 54 Mo. 193 ; Richardson v. 
Halstead, 44 Nebr. 606, 62 N. W. 
1077 ; Furber v. Chamberlain, 29 N. 
H. 405. An award is not conclusive 
as to a question submitted but not 
decided. Roanoke Rapids Power Co. 
V. Roanoke Navig. and Water Power 
Co. (N. Car.), 75 S. E. 29; See v. 
Partridge, 9 N. Y. Super. Ct. 463; 
Roof V. Brubacker, 1 Rawle (Pa.) 
304; Huckestein v. Kaufman, 173 Pa. 
St. 199, 33 Atl. 1028; Blakely v. Fra- 
zier, 11 S. Car. 122; Briggs v. Brews- 
ter, 23 Vt. 100; Bierly v. Williams, S 
Leigh (Va.) 700. 

"Munn v. Reed, 4 Allen (Mass.) 
431 ; Lee's Exrx. v. Dolan's Admx., 
39 N. J. Eq. 193; Birkbeck v. Bur- 
rows, 2 Hall (N. Y.) 51; Garrow v. 
Nicolai, 24 Ore. 76, 32 Pac. 1036; 
Connelly v. Arnold, 6 Watts (Pa.) 
312. See also, Buns v. Hindman, 7 
Ala. 531 ; Gardener v. Oden, 24 Miss. 
382; Richardson v. Halstead, 44 
Nebr. 606, 62 N. W. 1077. 

•^ Mortgage (Collier v. White, 97 
Ala. 615, 12 So. 385; Howett v. Moni- 
cal, 25 111. 122) ; insurance poHcy 
(Soars V. Home Ins. Co., 140 Mass. 
343, 5 N. E. 149). And where award 
merely approve's terms of contract, 
action may be brought on the con- 
tract. Keeler v. Harding, 23 Ark. 697. 

"Smith V. Johnson, IS East 213; 
Adams v. Ham, 5 U. C. 292. 



§ 2977 



ARBITRATION AND AWARD. 



2l6 



some American jurisdictions/" tliat all matters in difference be- 
tween the parties are merged in the award, whether or not 
brought before the arbitrators. The rule followed in most Amer- 
ican jurisdictions is that it may be shown that a matter within 
the scope of a general submission was not considered by the ar- 
bitrators, and an action on such matter is not barred by the 
award." An award made, pending an action for the same cause, 
is a bar thereto. '^^ A void award is no bar to an action on the 
original demand,^^ as where it is not certain and final," or all 
the arbitrators did not join in it,^'^ or the arbitrators failed to 
pass upon matters submitted,"*^ or gave a party no opportunity to 
be heard," or the submission was invalid.'^* Where an award 
is set aside or repudiated by parties, they become relegated to all 
their former rights, and may bring actions to enforce them.'*" A 
mere agreement to submit is not a bar to an action upon the mat- 



°'' Mcjimsey v. Traverse, 1 Stew. 
(Ala.) 244, 18 Am. Dec. 43; Bun- 
nel V. Pinto, 2 Conn. 431 ; Stepp v. 
Washington Hall Co., S Blackf. 
(Ind.) 473; West v. Averill Grocery 
Co., 109 Iowa 488, 80 N. W. 555; 
Evans v. McKinsey, Litt. Sel. Cas. 
(Ky.) 262; Gardener v. Oden, 24 
iNliss. 382 (see this case for discus- 
sion and review of early authorities 
on both sides). See also, Wheeler 
V. Van Houten, 12 Johns. (N. Y.) 
311 (the leading American case on 
this side) ; Fidler v. Cooper, 19 
Wend. (N. Y.) 285; Kendall v. 
Stokes, 3 How. (U. S.) 87, 11 L. ed. 
506. 

"^Stephens v. Gray, 2 Harr. (Del.) 
347; Mt. Desert v. Tremont, 75 
Maine 252; Evans v. Clapp, 123 Mass. 
165, 25 Am. Rep. 52; Webster v. Lee, 
S Mass. 334 (the leading case for this 
view) ; King v. Savory, 8 Cush. 
(Mass.) 309; Pearce v. Mclntyre, 29 
Mo. 423; Bentley v. Davis, 21 Nebr. 
685, 33 N. W. 473; Elliott v. Quim- 
by, 13 N. H. 181; Lee v. Dolan, 39 
N, J. Eq. 193, 40 N. J. Eq. 338 (see 
Veghte V. Hoagland, 29 N. J. L. 125) ; 
Walker v. Walker, 60 N. Car. 255; 
Newman v. Wood, Mart. & Y. 
(Tenn.) 190; Ennos v. Pratt, 26 
Vt. 630 (Barker v. Belknap's Estate, 
39 Vt. 168). 



":\IcAlpin V. May, 1 Stew. (Ala.) 
520; Bowen v. Lazalere, 44 Mo. 383; 
Moore v. Austin, 85 N. Car. 179. 

''Logsdon V. Roberts, 3 T. B. Mon. 
(Ky.) 255; Cobb v. Wood, 32 Maine 
455; Estes v. Mansfield, 6 Allen 
(Mass.) 69; Smith v. Holcomb, 99 
Mass. 552 ; Morton v. Cameron, 3 
Rob. (N. Y.) 189; Moran v. Bogert, 
16 Abb. Pr. (N. S.) (N. Y.) 303; 
McAllister v. McAllister, 10 Heisk. 
(Tenn.) 345; Cauthorn v. Courtney, 
6 Grat. (Va.) 381; Turner v. Stew- 
art, 51 W. Va. 503, 41 S. E. 924. 

"Fletcher v. Webster, 5 Allen 
(Mass.) 566; Smith v. Holcomb, 99 
Mass. 552 ; Cauthorn v. Courtney, 
6 Grat. (Va.) 381. 

"'Bayne v. Gaylord, 3 Watts (Pa.) 
301; Memphis &c. R. Co. v. Pillow, 
9 Heisk. (Tenn.) 248. 

""Rollins v. Townsend, 118 Mass. 
224; Canfield v. Watertown F. Ins. 
Co., 55 Wis. 419, 13 N. W. 252. 

"Cobb V. Wood, 32 Maine 455; 
Moran v. Bogert. 3 Hun (N. Y.) 603, 
16 Abb. Pr. (N. S.) (N. Y.) 303. 

"'Logsdon V. Roberts's Exrs., 3 
T. B. Mon. (Ky.) 255. 

""Redmond v. Bedford, 40 111. 267; 
Burnside v. Potts, 23 111. 411; Bur- 
roughs V. Thome, 5 N. J. L. 895; 
Smith V. Cooley, 5 Daly (N. Y.) 401; 
Bellows V. Ingham, 2 Vt. 575. 



217 



AWARD. 



§ 2977 



ters agreed to be submitted."" If the arbitrators refuse to con- 
sider a demand placed before them, the award is no bar to a suit 
on such demand."^ Since the presumption is that the arbitrators 
considered all the matters presented, one who seeks to bring an . 
action upon a matter within the submission must show that they 
did not act upon it."^ If there are mutual remedies upon an 
award, it is not necessary that it shall have been performed by , 
the party relying upon it as a defense, before setting it up as a 
bar."^ But performance may be made a condition precedent to 
its use as a defense."* An award itself cannot operate as a con- 
veyance of real estate,"^ but it may work an estoppel preventing 
a party from claiming title,"" and where the location of boundary 
lines is submitted, the award is conclusive as to the location."' 
An award declaring the title to land to be in one party may sup- 
port an action in ejectment,"' or be set up as a defense in such 



""Ross V. Nesbit, 72 Gilm. (111.) 
252; Cavanaugh v. Dooley, 6 Allen 
(Mass.) 66; Callanan v. Pt. Huron 
&c. R. Co., 61 Mich. 15, 27 N. W. 
718; Bowen v. Lazalere, 44 Mo. 383. 
See also, Harris v. Reynolds, 7 Q. B. 
71, 9 Jur. 808, 14 L. J. Q. B. 241, 53 
E. C. L. n. See cases cited in note 
17, § 2941. 

"'Pritchard v. Daly, 12, 111. 523; 
Bixby V. Whitney, 5 Greenl. (Maine) 
192. 

"^Engleman's Exrs. v. Engleman, 1 
Dana (Ky.) 437. 

"" Burns v. Hindman, 7 Ala. 531; 
Merritt v. Merritt, 11 111. 565; Wal- 
ters V. Hutchins' Admx., 29 Ind. 
136; Groat v. Pracht, 31 Kans. 656, 
3 Pac. 274; Duren v. Getchell, 55 
Maine 241 ; Hamlin v. Duke, 28 Mo. 
166; Jessiman v. Haverhill & F. Iron 
Manufactory, 1 N. H. 68; Cox v. 
Jagger, 2 Cow. (N. Y.) 638, 14 Am. 
Dec. 522. See also, Adams v. Ham, 
5 U. C. Q. B. 292; Freeman v. Ber- 
nard, 1 Salk. 69, 1 Ld. Raym. 247. 

"Commonwealth v. Pejepscut 
Props., 7 Mass. 399; Elliott v. Quim- 
by. 13 N. H. 181. 

"Doe V. Rosser, 3 East (Eng.) 
15; Snedeker v. Allen, 2 N. J. I.. 
32; Calhoun's Lessee v. Dunning. 4 
Call. (Pa.) 120; 1 L. ed. (U. S.) 
767; Miller v. Moore, 7 Serg. & R. 
(Pa.) 164. 



"Odura V. Rutledge &c. R. Co., 94 
Ala. 488, 10 So. 222; Shelton v. Al- 
cox, 11 (ionn. 240; Brown v. Wheeler, 
17 Conn. 345, 44 Am. Dec. 550; 
Shackelford v. Purket, 2 A. K. 
Marsh (Ky.) 435, 12 Am. Dec. 422; 
Goodridge v. Dustin, 5 Mete. (Mass.) 
363; Ford v. Burleigh, 60 N. H. 
278; Robertson v. McNeil, 12 Wend. 
(N. Y.) 578; Thompson v. Deans, 
6 Jones Eq. (N. Car.) 22; Dixon's 
Lessee v. Morehead, Add. (Pa.) 
216; Garvin v. Garvin, 55 S. Car. 360, 
ZT, S. E. 458. See also. Doe v. Ross- 
er, 3 East 15. 

"Bell v. Casey, 32 Ky. L. 1180, 108 
S. W. 261; Philbrick v. Preble, 18 
Maine 255, 36 Am. Dec. 718; Good- 
ridge V. Dustin, 5 Mete. (Mass.) 
idi; Searle v. Abbe, 13 Gray (Mass.) 
409; Jones v. Dewey, 17 N. H. 596; 
Sellick v. Addams, 15 Johns. (N. 
Y.) 197; Pearson v. Barringer, 109 
N. Car. 398, 13 S. E. 942; Davis v. 
Havard, 15 Serg. & R. (Pa.) 165, 16 
Am. Dec. 537; Stewart v. Cass, 16 
Vt. 663, 42 Am. Dec. 534; Miller v. 
Miller, 99 Va. 125, 37 S. E. 792. 

""Doe v. Rosser, 3 East IS; Doe 
V. Long, 4 U. C. Q. B. 146; Shelton 
V. Alcox, 11 Conn. 240; Shackelford 
V, Purket, 2 A. K. Marsh. (Ky.) 
435. 12 Am. Dec. 422: Cox v. Jagger, 
2 Cow. (N. Y.) 638, 14 Am. Dec. 



ARBITRATION AND AWARD. 



2l8 



action/" or be proof of title in an action to quiet title.'"' An 
award as to the title to personalty is conclusive.'^ An award has 
no binding effect upon strangers to the submission/^ yet they 
may ratify it and be bound/^ and an award binds privies to the 
parties." An award of itself is not a lien.'^ But where under 
the statute judgment is entered upon an award, there is a lien 
similar to any other judgment lien.^'^ Whenever in subsequent 
litigation between the parties, the facts necessarily involved in 
the arbitration are brought directly in issue, the award is con- 
clusive evidence as to these.''' 



§ 2978. Costs of arbitration. — It is held in England and 
some American jurisdictions that arbitrators have no general power 
to award to one party the costs of the arbitration, unless such power 
is conferred by the submission or by statute.'* The submis- 



522; Calhoun v. Dunning, 4 Dall. 
(Pa.) 120, 1 L. ed. 767. 

••Moore v. Helms, 74 Ala. 368; 
Calhoun's Lessee v. Dunning, 4 Dall. 
(Pa.) 120, 1 L. ed. (U. S.) 767. 

'"Rich V. Turnbull, 95 Ga. 752, 22 
S. E. 581. 

"Clapp V. Shepard, 2 Mete. 
(:\Iass.) 127; Mc Arthur v. Oliver, 53 
Mich. 299, 19 N. W. 5, 8; Girdler 
V. Carter, 47 N. H. 305; Ford v. 
Burleigh, 60 N. H. 278, 62 N. H. 
388; Ridgell v. Dupree (Tex.), 85 
S. W. 1166. 

'" Chapman v. Champion, 2 Day 
(Conn.) 101; Woody v. Pickard, 8 
Blackf. (Ind.) 55; Emery v. Fowler, 
38 Maine 99; Brigham v. Holmes, 14 
Allen (Mass.) 184; Coan v. Osgood, 
15 Barb. (N. Y.) 583; Multnomah 
County V. Willamette Towing Co., 49 
Ore. 204, 89 Pac. 389; Kratzer v. 
Lyon, 5 Pa. St. 274 ; Runyon v. Ruth- 
erford, 55 W. Va. 436, 47 S. E. ISO. 
See Todd v. Old Colony R. Co., 3 Al- 
len (Mass.) 18, 80 Am. Dec. 49. 

"McGehee v. McGehee, 12 Ala. 
83 ; Johnson v. Cochran, 81 Ga. 39, 6 
S. E. 809, 12 Am. St. 294; Russell 
V. Allard, 18 N. H. 222; George v. 
Johnson, 45 N. H. 456; Humphreys 
V. Gardner, 11 Johns. (N. Y.) 61; 
Taylor v. Remington, 51 N. Y. 663, 



"Elliott Ev., § 1668; Rice v. Turn- 
bull, 95 Ga. 752, 22 S. E. 581 ; Home 
V. Hutchins, 71 N. H. 128, 51 Atl. 
651; Coan v. Osgood, 15 Barb. (N. 
Y.) 583. 

"Jones V. Winans, 20 N. J. Eq. 
96. 

" Miller V. Fisk, 47 Ga. 27(X; Steph- 
en's Appeal, 38 Pa. St. 9; Eaton's 
Appeal, 83 Pa. St. 152. See Memphis 
&c. R, Co. V. Scruggs, 50 Miss. 284, 
for equitable lien created by submis- 
sion. 

" Elliott Ev., § 1668 ; Whitehead v. 
Tattersall, 1 Ad. & El. 491, 28 E. C. 
L. 239; Caldwell v. Caldwell, 121 
Ala. 598, 25 So. 825; Allen-Bradley 
Co. V. Anderson &c. Dist. Co., 16 Ky. 
L. (abstract) 350; Prentiss v. Wood, 
132 Mass. 486; Haubrick v, Johnston, 
23 ]\Iinn. 237; Gaylord v. Gaylord, 48 
N. Car. 367 ; Tennessee Mfg. Co. v. 
Haines, 16 R. L 204, 14 Atl. 853. 

"Firth V. Robinson, 1 Barn. & Cr. 
277, 1 L. J. K. B. (O. S.) 115, 8 E. 
C. L. 119; Dickerson v. Tyner, 4 
Blackf. (Ind.) 253; Walker v. Mer- 
rill, 13 Maine 173; Vose v. How, 13 
Mete. (Mass.) 243; Maynard v. Fred- 
erick, 7 Cush. (Mass.) 247; Griffin 
V. Hadley, S3 N. Car. 82; Dundon 
V. Starin, 19 Wis. 261. 



219 AWARD. § 2978 

sion' ° or statute'" may confer such power. In most American ju- 
risdictions, the rule holds that arbitrators have implied author- 
ity to award as to costs." The general rule is that if an 
action pending is submitted to arbitrators for final decision, 
the arbitrators have authority to award the costs of the ac- 
tion up to the submission, such being impliedly included in the 
submission.^^ But even where arbitrators have incidental power 
to award costs, they have no power unless specifically conferred, 
to award that one party shall recover from the other his expenses 
incurred,*^ or attorney's fees.** As a general rule, where the 
award of costs is within the authority of arbitrators, their action 
in making such allowance and fixing the amount is discretionary, 
and will not be reviewed by the courts,*"^ unless the statute per- 
mits.*" Where an award is under the statute, the statutory pro- 
visions must be substantially followed in order to make an award 
of costs valid.*^ An award of costs in gross is sufficiently cer- 

" Clement v. Comstock, 2 Mich, veer, 4 Denio (N. Y.) 249; Oakley 

359; Akely v. Akely, 17 How. Pr. (N. v. Anderson, 93 N. Car. 108; Austin 

Y.) 21; Schneider v. New York &c. v. Snow, 2 Dall. (U. S.) 157, 1 L. ed. 

Gas. Co., 98 Pa. St. 470; Morrison 329, 1 Yeates (Pa.) 156. See Bird 

V. Buchanan, 32 Vt. 289. See Cones v. Routh, 88 Ind. 47; Hartland v. 

V. Vanosdol, 4 Ind. 248. Henry, 44 Vt. 593. 

"Dickerson v. Tyner, 4 Blackf. ^ Akely v. Akely, 17 How. Pr. (N. 

(Ind.) 253; Ratliff v. Mann, 5 Iowa Y.) 21; Amsterdam v. Vanderveer, 4 

423; Harden v. Harden, 11 Gray Denio (N. Y.) 249; Dundon v. Starin, 

(Mass.) 435; McClure v. Shroyer, 13 19 Wis. 261. 

Mo 104 °* Republic of Colombia v. Cauca 

''Dudley V. Thomas, 23 Cal. 365; Co., 106 Fed. ii7, affd. 113 Fed. 1020; 

Ailing V. Munson, 2 Conn. 691 ; Stew- Warner v. Collins, 135 Mass. 26; 

art V. Grier, 7 Houst. (Del.) 378, 32 Jones v. Carter, 8 Allen (Mass.) 

Atl. 328; Wade v. Powell, 31 Ga. 1; 431. 

Bird V. Routh, 88 Ind. 47; McClure »= Miller v. Fisk, 47 Ga. 270; Dist. 

V. Shroyer, 13 Mo. 104; Spofford v. Tp. of Little Sioux v. Independent 

Spofford, 10 N. H. 254 (reviewing Dist. of Little Sioux, 60 Iowa 141, 

cases) • New York Lumber &c. Co. 14 N. W. 201 ; Thoseau v. Rallies, 5 

V. Schnieder, 119 N. Y. 475, 24 N. E. Allen (Mass.) 354; Nelson v. An- 

4- Oakley v. Anderson, 93 N. Car. drews, 2 Mass. 164; Sides v. Brend- 

108; Young v. Shook, 4 Rawle (Pa.) linger, 14 Nebr. 491, 17 N. W. 113. 

299; BoUraan v. Bollman, 6 S. Car. ™ James v. Southern Lumber Co., 

29; Burnell v. Everson, 50 Vt. 449; 153 Mass. 361, 26 N. E. 995. 

Henley v. Menefee, 10 W. Va. 771. '' Estep v. Larsh, 16 Ind. 82; Har- 

'' Firth V. Robinson, 1 Barn. & Cr. rington v. Hamblin, 12 Wend. (N. 

277, 1 L. J. K. B. (O. S.) 115, 8 E. Y.) 212; Hewitt v. Furman, 16 Serg. 

C. L. 119; Vose v. How, 13 Mete. & R. (Pa.) 135; Lindenburger v. Un- 

(Mass.) 243; Nelson v. Andrews, 2 ruh, 1 Browne (Pa.) 194. 
Mass. 164; Amsterdam v. Vander- 



§ 2979 'ARBITRATION AND AWARD. 220 

tain in the absence of a requirement that the items be set out 
specifically.^^ An award in a common-law arbitration, which 
does not set out the amount of costs, or make the amount a sim- 
ple matter of computation, is void for uncertainty."" But an 
award of court costs in general terms, without fixing the amount, 
referring to the taxing officer of the court for amount, or with- 
out such reference, is valid."" It is held that there can be no re- 
covery of costs by the party in whose favor the award was made 
unless costs are awarded specifically."^ If an award of costs, 
invalid because made without authority, or because of uncertainty, 
can be separated from the rest of the award, the remaining por- 
tions are held good."^ Of course, if an invalid award of costs is 
inseverable, the whole award is bad."' The losing party can- 
not object to an unauthorized award of costs against the other 
party,"* and if no objection to an invalid award of costs is made 
until after judgment is rendered, it is held to be waived."^ 

§ 2979. Impeachment of award — Grounds. — All presump- 
tions are made in favor of awards, and courts are reluctant to set 
them aside."" An honest mistake of fact by arbitrators as to 

"Thoreau v. Pallies, 5 Allen Garitee v. Carter, 16 Md. 309; Hub- 

CMass.) 354; Tallman v. Tallraan, 5 bell v. Bissell, 2 Allen (Mass.) 196; 

Cush. (Mass.) 32S. Clement v. Comstock, 2 Mich. 359; 

"Shurtleff v. Parker, 138 Mass. 86; Chase v. Strain, 15. N. H. 535; Am- 

Leominster v. Fitchburg & W. R. sterdam v. Vanderveer, 4 Denio (N. 

Co., 7 Allen (Mass.) 38; School Dist. Y.) 249; Stevens v. Brown, 82 N. 

No. 3 V. Aldrich, 13 N. H. 139; Car. 460; Prouse v. Painter, Tapp. 

Schuyler v. Van Der Veer, 2 Caines (Ohio) 52; Heath v. Atkinson, 1 

(N. Y.) 235. Browne (Pa.) 231; Rixford v. Nye, 

" Landreth v. Bass, 12 Iowa 606 ; 20 Vt. 132. 

Brown v. Warnock, 5 Dana (Ky.) "In re Coombs, 4 Exch. 839; Tur- 

492 ; Loud v. Hobart, 2 Cush. ner v. Burt, 24 N. Brun. 547 ; Walker 

(Mass.) 325; Boughton v. Seamans, v. Merrill, 13 Maine 173. 

9 Hun (N. Y.) 392; Liverpool Pack- " Gudgell v. Pettigrew, 26 111. 305. 

at, 2 Sprague (U. S.) 37, Fed. Cas. '"Darst v. Collier, 86 111. 96; Post 

No. 8407; Macon v. Crump, 1 Call. v. Sweet, 8 Serg. & R. (Pa.) 391. 

(Va.) 575. See cases cited in note 83, ""Byrd v. Odem, 9 Ala. 755; Proc- 

§ 2965. tor & Gamble Co. v. Blakelv &c. Co., 

" Hamilton v. Wort, 7 Blackf. 128 Ga. 606, 57 S. E. 879 ; tyblewski 
(Ind.) 348; School Dist. No. 3 v. v. Svea Fire &c. Co., 121 111. App. 
Aldrich, 13 N. H. 139; Den v. Exton, 528, 220 111. 436, 77 N. E. 196; Brown 
4 N. J. L. 173; Harralson v. Pleas- v. Harness, 11 Ind. App. 426, 38 N. 
ants, 61 N. Car. 365 ; Morrison v. E. 1098 ; McKinney v. Western Stage 
Buchanan, 32 Vt. 289. See also, Co., 4 Iowa 420; Edwards v. Harts- 
Bellas V. Levy, 2 Rawle (Pa.) 21. horn, 72 Kans. 19, 82 Pac. 520, 1 L. 

""Cones v. Vanosdol, 4 Ind. 248; R. A. (N. S.) 1050; Poggenburg v. 

Brown v. Warnock, 5 Dana (Kv.) Conniff, 23 Ky. L. 2463, 67 S. W. 

492; Day v. Hooper, 51 Maine 178; 845; Tyler v. Tyler, 13 Maine 41; 



221 



AWARD. 



2979 



the effect or weight of the evidence, or an honest mistake of judg- 
ment on their part, is not a ground for impeachment." Nor is 
a mistake in admitting or rejecting evidence ordinarily ground 
for impeachment,"* unless it can be shown that the award would 
have been changed had the action as to such evidence been dif- 
ferent."" But where there is a material mistake of fact apparent 



Bigelow V. Newell, 10 Pick. (Mass.) 
348; Brush v. Fisher, 70 Mich. 469, 
38 N. W. 446, 14 Am. St. 510; Fu- 
dickar v. Guardian Mut. Life Ins. 
Co., 62 N. Y. 392; Chester v. Mc- 
Intyre, 13 Pa. Super. Ct. 545; Mul- 
der V. Cravat, 2 Bay (S. Car.) 370; 
Eureka Pipe Line Co. v. Sirams, 62 
W, Va. 628, 59 S. E. 618; Eau Claire 
V. Eau Claire Water Co., 137 Wis. 
517, 119 N. W. 555; Waisner v. Wais- 
ner, 15 Wyo. 420, 89 Pac. 580, 123 
Am. St. 1081. See Elliott Ev., § 1655. 
See cases cited in note 39, § 2976. 

" Bumpass v. Webb, 4 Port. (Ala.) 
65, 29 Am. Dec. 274 ; Kirten v. Spears, 
44 Ark. 166; Carsley v. Lindsay, 14 
Cal. 390; Wilson v. Wilson, 18 Colo. 
615, 34 Pac. 175; Curley v. Dean, 4 
Conn. 259, 10 Am. Dec. 140; Hall 
V. Norwalk Fire Ins. Co., 57 Conn. 
105, 17 Atl. 356; Stewart v. Grier, 7 
Houst. (Del.) 378, 32 Atl. 328; Lester 
V. Callaway, li Ga. 730; White Star 
Mining Co. v. Hultberg, 220 111. 601, 
n N. E. 327; Moore v. Barnett, 17 
Ind. 349; Thornton v. McCormick, 75 
Iowa 285, Z9 N. W. 502; Russell v. 
Seery, 52 Kans. 736, 35 Pac. 812; 
Rudd V. Jones, 4 Dana (Ky.) 229; 
Amet V. Boyer, 36 La. Ann. 266; 
Whitmore v. Le Ballistier, 35 Maine 
488; Cromwell v. Owings, 6 Har. & 
J. (Md.) 10; Davis v., Henry, 121 
Mass. 150 ; Brush v. Fisher, 70 Mich. 
469, 38 N. W. 446, 14 Am. St. 510; 
Goddard v. King, 40 Minn. 164, 41 N. 
W. 659 ; Jenkins v. Meagher, 46 Miss. 
84 ; Valle v. North Missouri R. Co., 37 
Mo. 445; Piersons v. Hobbes, 33 N. 
H. 27 ; Booye v. Muth, 69 N. J. L. 266, 
55 Atl. 287; Masury v. Whiton, 111 
N. Y. 679, 18 N, E. 638; Smith v. 
Cutler. 10 Wend. (N. Y.) 589, 25 Am. 
Dec. 580; Pierce v. Perkins, 17 N. 
Car. 250 ; Caldwell v. Brooks Elevator 
Co., 10 N. Dak. 575, 88 N, W. 700; 
Speer v. Bidwell, 44 Pa. St. 23; 
M'Calmont v. Whitaker, 3 Rawle 



(Pa.) 84, 23 Am. Dec. 102; Harris v. 
Social Mfg. Co., 8 R. I. 133, 5 Am. 
Rep. 549; Rounds v. Aiken Mfg. 
Co., 58 S. Car. 299, 36 S. E. 714; 
Bowden v. Crow, 2 Tex. Civ. App. 
591, 21 S. W. 612; Morse v. Bishop, 
55 Vt. 231; Ross v. Overton, 3 Call 
(Va.) 309, 2 Am. Dec. 552; Tennant 
v. Divine, 24 W. Va. 387 ; Snohomish 
County School Dist. No. 5 v. Sage, 13 
Wash. 352, 43 Pac. 341; Consoli- 
dated Water Power Co. v. Nash, 109 
Wis. 490, 85 N. W. 485. See also, 
Hartford F. Ins. Co. v. Bonner Mer- 
cantile Co., 44 Fed. 151, 11 L. R. A. 
623 and note, affd. 56 Fed. 378, S C. 
C. A. 524. And see Knox v. Sym- 
monds, 1 Ves. Jr. 369, 3 Bro. Ch. 
358; Baggalay v. Borthwick, 10 C. B. 
(N. S.) 61, 100 E. C. L. 61, 30 L. J. 
C. P. 342. See Shawhan v. Baker 
(Mo.), 150 S. W. 1096. 

»» Harding v. Wallace, 8 B. Mon. 
(Ky.) 536; Sanborn v. Paul, 60 
Maine 325; Fuller v. Wheelock, 10 
Pick. (Mass.) 135; Vaughn v. Gra- 
ham, 11 Mo. 575; Johnson v. Noble, 
13 N. H. 286, 38 Am. Dec. 485; 
Hartshorne v. Cuttrell, 2 N. J. Eq. 
297; Viele v. Troy & B. R. Co., 21 
Barb. (N. Y.) 381, af?d. 20 N. Y. 184; 
Hollingsworth v. Leiper, 1 Dall. 
(Pa.) 161, 1 L. ed. 82; Mulder v. 
Cravat, 2 Bay (S. Car.) 370; Sabin 
v. Angell, 44 Vt. 523. See also. Fer- 
ryman v. Steggall, 9 Bing. 679, 2 
Dowl. P. C. 726, 2 L. J. C. P. 115, 3 
Moore & S. 93, 23 E. C. L. 757. Beall 
V. Board of Trade, 164 Mo. App. 186, 
148 S. W. 386. 

"Lester v. Callaway, 73 Ga. 730; 
Sanborn v. Paul, 60 Maine 325 ; Ray- 
mond v. Farmers' Mut. F. Ins. Co. of 
Mecosta, 114 Mich. 386, 72 N. W. 
254; Chesley v. Chesley, 10 N. H. 
327; Fudickar v. Guardian Mut. L. 
Ins. Co.. 62 N. Y. 392; Bassett v. 
Cunningham, 9 Grat. (Va.) 684. 



2979 



'ARBITRATION AND AWARD. 



222 



on the face, of the award/ or an extrinsic showing that the arbi- 
trators were so misled or deceived that they did not apply the 
rules of decision they intended to apply, and reached a result they 
did not intend,^ then the court will relieve from such mistake. 
But the mistake must be one plain and palpable, and such that 
it appears the arbitrators must have otherwise decided but for 
the mistake;' for example, an obvious miscalculation of amount 
is such a mistake.* In general, arbitrators are not required to 
follow strict rules of law, but may decide as they think just.' 
So, generally, an award is not set aside because the arbitrators 
mistook the law." But where an arbitrator is required by the sub- 



' Tyson v. Wells, 2 Cal. 122 ; Ward 
V. Rhodes, 14 Ky. L. (abstract) 80; 
Witz V. Tregallas, 82 Md. 351, 33 
Atl. 718; Boston Water Power Co. v. 
Gray, 6 Mete. (Mass.) 131; Cochran 
V. Bartle, 91 Mo. 636, 3 S. W. 854; 
Bissell V. Morgan, 56 Barb. (N. Y.) 
369; Cornogg v. Abraham, 1 Yeates 
(Pa.) 84; Pleasants v. Ross, 1 Wash. 
(Va.) 156, 1 Am. Dec. 449. See also, 
Hagger v. Baker, 2 Dowl. & L. 856, 
14 L. J. Exch. 227, 14 M. & W. 9; 
Kleine v. Catara, 2 Gall. (U. S.) 61, 
Fed. Cas. No. 7869. 

^ Allen V. Ranney, 1 Conn. 569; 
Thrasher v. Overby, 51 Ga. 91 ; Pul- 
liam V. Pensoneau, 33 111. 375 ; Gor- 
ham V. Milliard, 50 Iowa 554; Davis 
V. Henry, 121 Mass. 150; Barrows v. 
Sweet, 143 Mass. 316, 9 N. E. 665; 
Bean v. Wendell, 20 N. H. 213; De 
Castro V. Brett, 56 How. Pr. (N. Y.) 
484; Sweet v. Morrison, 116 N. Y. 
19, 22 N. E. 276, 15 Am. St. 376; 
Bell V. Price, 22 N. J. L. 578; 
Swasev V. Laycock, 1 Handy (Ohio) 
334, 12 Ohio Dec. 170; Newton v. 
Grambo, 1 Browne (Pa.) 235; Cham- 
bers V. Chambers &c. Glass Co., 185 
Pa. St. 315, 7 Atl, 910; American 
Screw Co. v. Sheldon, 12 R. I. 324; 
Aiken v. Bolan, 1 Brev. (S. Car.) 
239, 2 Am. Dec. 660 ; Conger v. James, 
2 Swan (Tenn.) 213; Kleine v. Ca- 
tara, 2 Gall. (U. S.) 61, 14 Fed. Cas. 
7869. 

'Sweet V. Morrison, 116 N. Y, 19, 
22 N. E. 276, 15 Am. St. 376, affd. 24 
N. E. 1097. See also, Tomlinson v. 
Hardwick, 41 Ga. 547; Eisenmeyer 
V. Sauter, T7 111. 515 ; Ward v. Ameri- 
can Bank, 7 Mete. (Mass.) 486; 



Brown v. Bellows, 4 Pick. (Mass.) 
179; Buys v. Eberhardt, 3 Mich. 524; 
Perkins v. Giles, 50 N. Y. 228; Bouck 
V. Wilber, 4 Johns. Ch. (N. Y.) 
405; Govett v. Reed, 4 Yeates (Pa.) 
456; American Screw Co. v. Sheldon, 
12 R. I. 324; Sumpter v. Murrell, 2 
Bay (S. Car.) 450; ?\Ioore v. Jones, 
(Tex. Civ. App.), 25 S. W. 987; Con- 
sol. Water Power Co. v. Nash, 109 
Wis. 490, 85 N. W. 485. See In re 
Hall, 10 L. J. C. P. 210, 2 M. & G. 
847, 40 E. C. L. 886 ; Frick v. Chris- 
tian, 1 Fed. 250. 

'Thrasher v. Overby, 51 Ga. 91; 
Algona Dist. Tp. v. Lotts Creek 
Dist. Tp., 54 Iowa 286, 6 N. W. 295 ; 
Taylor v. Brown, 4 Kv. L. 628; 
Carter v. Carter, 109 Mass. 306; 
Alitchell V. Curran, 1 3.Io. App. 453 ; 
Newland & Douglass, 2 Johns. (N. 
Y.) 62. ^ 

° McKinnis v. Freeman, 38 Iowa 
364; Canty v. Beal, 17 La. 282; Tyler 
V. Dver, 13 Maine 41 ; Johnson v. 
Noble, 13 N. H. 286, 38 Am. Dec. 
485; Leslie v. Leshe, 50 N. J. Eq. 
103, 24 Atl, 319 : Mitchell v. Bush, 7 
Cow. (N. Y.) 185 : Henry v. Hilliard, 
120 N. Car. 479, 27 S. E. 130 ; Smith 
V. Wilkinsburg, 172 Pa. St. 121, 33 
Atl. 371; Mulder v. Cravat, 2 Bay 
(S. Car.) 370; Jocelyn v. Donnei, 
Peck (Tenn.) 274, 14 Am. Dec. 753; 
Remelee v. Hall, 31 Vt. 582, 76 Am. 
Dec. 140. 

'Bumpass v. Webb, 4 Port. (Ala.) 
65, 29 Am. Dec. 274; Kirten v. Spears, 
44 Ark. 166; Hall v. Norwalk Fire 
Ins. Co., 57 Conn. 105, 17 Atl. 356; 
Forbes v. Turner, 54 Ga. 252; Sherfy 
V. Graham, 72 111. 158; Conrad v. 



223 



AWARD. 



§ 2979 



mission or statute to follow the law, a clearly mistaken construc- 
tion of the law will cause the award to be set aside.^ It is also held 
that if the arbitrators intended to decide according to law, but 
misconstrued or mistook it, the award will be set aside as not 
expressing their intent.^ An award procured by fraud, undue 
influence, or other unfair means used by a party to the arbitra- 
tion, will be set aside." Fraud, misconduct, bad faith, or corrup- 
tion on the part of the arbitrators is ground for setting aside an 

Johnson, 20 Ind. 421; McKinnis v. 
Freeman, 38 Iowa 364; Curd v. Wal- 
lace, 7 Dana (Ky.) 190, 32 Am. 
Dec. 85; Amet v. Boyer, 36 La. Ann. 
266; Walker v. Sanborn, 8 Greenl. 
(A'laine) 288; Gardner v. Boston, 120 
Mass. 266; Brush v. Fisher, 70 Mich. 
469, 38 N. W. 446, 14 Am. St. SIO; 
Goddard v. King, 40 Minn. 164, 41 
N. W. 659; Memphis &c. R. Co. v. 
Scruggs, SO Miss. 284; Reily v. Rus- 
sell, 34 Mo. 524; Fudickar v. Guar- 
dian Mut. Life Ins. Co., 62 N. Y. 
392; Sanborn v. Murphy, SO N. H. 
65; Patton v. Garrett, 116 N. Car. 
847, 21 S. E. 679; Speer v. Bidwell, 
44 Pa. St. 23 ; Orrasby v. Bakewell, 7 
Ohio 98, pt. 1 ; Harris v. Social Mfg. 
Co., 8 R. I. 133, 5 Am. Rep. 549; BoU- 
mann v. Bollmann, 6 S. Car. 29; 
Nance's Lessee v. Thompson, 1 Sneed 
(Tenn.) 321; Moore v. Jones (Tex.), 
25 S. W. 987; Baggalay v. Bosthwick, 
10 C. B. (N. S.) 61, 100 E. C. L. 
61, 30 L. J. C. P. 342; Kleine v. 
Catara, 2 Gall. (U. S.) 61, Fed. Cas. 
No. 7869; Cutting v. Stone, 23 Vt. 
571 ; Hollingsworth v. Lupton, 4 
Munf. (Va.) 114; Mathews v. Mill- 
er, 25 W. Va. 817; Bartlett v. L. 
Bartlett &c. Co., 116 Wis. 4S0, 93 N. 
W. 473. See, Shawhan v. Baker 
(Mo.), ISO S. W. 1096. 

'Hall V. Norwalk F. Ins. Co., 57 
Conn. 105, 17 Atl. 356; Estes v. 
Mansfield, 6 Allen (Mass.) 69; 
Mickles v. Thayer, 14 Allen (Mass.) 
114; Sanborn v. Murphy, 50 N. H. 
65; Galbraith v. Lunsford, 87 Tenn. 
89, 9 S. W. 365, 1 L. R. A. 522; 
Snohomish County School Dist. No. 
5 V. Sage, 13 Wash. 352, 43 Pac. 341. 

'McRae v. Buck, 2 Stew. & P. 
(Ala.) 155; Muldrow v. Norris, 2 
Cal. 74, 56 Am. Dec. 313 ; South Car- 
olina R. Co. V. Moore, 28 Ga. 398, 73 
Am. Dec. 778; Crabtree v. Green, 8 



Ga. 8; White Star Min. Co. v. Hult- 
berg, 220 111. 610, 11 N. E. 153; 
Curd V. Wallace, 7 Dana (Ky.) 190, 
32 Am. Dec. 85; Heuitt v. State, 6 
Har. & J. (Md.) 95, 14 Am. Dec. 
259; Knight v. Wilder, 2 Cush. 
(Mass.) 199, 48 Am. Dec. 660; 
Vaughn v. Graham, 11 Mo. 575; 
Johnson v. Noble, 13 N. H. 286, 38 
Am. Dec. 485 ; Ruckman v. Ransom, 
23 N. J. Eq. 118; Fudickar v. Guar- 
dian ^lut. Life Ins. Co., 62 N. Y. 
392; Leach v. Harris, 69 N. Car. 532; 
Murray v. Henrie, 11 Pa. St. 412; 
State V. Ward, 9 Heisk. (Tenn.) 
100; United States v. Ames, 1 
Woodb. & M. (U. S.) 76, Fed. Cas. 
14441; Smith v. Sprague, 40 Vt. 
43 ; Willoughby v. Thomas, 24 Grat. 
(Va.) 521; Mathews v. Miller, 25 
W. Va. 817. 

° But it is held equity will not set 
aside an award on the ground of per- 
jury in obtaining it. French v. Ray- 
mond, 82 Vt. 156, 72 Atl. 324, 137 
Am. St. 994; Waisner v. Waisner, IS 
Wyo. 420, 89 Pac. 580, 123 Am. St. 
1081. See also. Chambers v. Crook, 
42 Ala. 171, 94 Am. Dec. 637; Brown 
V. Green, 7 Conn. 536; Wilkins v. 
Van Winkle, 78 Ga. 557, 3 S. E. 761 ; 
Catlett V. Dougherty, 114 111. 568, 2 
N. E. 669; Robinson v. Shanks, 118 
Ind. 125, 20 N. E. 713; Conger v. 
Dean, 3 Iowa 463, 6^ Am. Dec. 93; 
Strong V. Strong, 9 Cush. (Mass.) 
560; Beam v. Macomber, Zi Mich. 
127; Valle v. North Missouri R. Co., 
Zl Mo. 445; Craft v. Thompson, 51 
N. H. 536; Herndon v. Imperial F. 
Ins. Co., 110 N. Car. 279, 14 S. E. 
742; Conway v. Duncan, 28 Ohio St. 
102; Phila. F. Asso. v. Allesina, 49 
Ore. 316, 89 Pac. 960; Brandon v. 
Forest, 59 Pa. St. 187; Brown v. 
Harklerode, 7 Humph. (Tenn.) 19; 
Aycock V. Doty, 1 Tex. App. Civ. 



2979 



ARBITRATION AND AWARD. 



224 



award.^" Partiality or bias of the arbitrators toward one party 
is a ground for setting aside an award/^ so an award may on its 
face so favor one party that it will be set aside/^ For slight 
irregularities, the arbitrators using good faith, and no harm being 
done to the parties, an award will not be set aside.^' But certain 
irregularities are held to be misconduct, such as failure to give 
notice of meetings to parties,^* refusal to hear competent evi- 



Cas., § 221; Cox v. Fay, 54 Vt. 446; 
Fluharty v. Beatty, 22 W. Va. 698. 

"McFarland v. Mathis, 10 Ark. 
560; Meredith v. Sanborn, 5 Har. 
(Del.) 249; Jackson v. Roane, 90 Ga. 
669, 16 S. E. 650, 35 Am. St. 238; 
Moshier v. Shear, 102 111. 169, 40 
Am. Rep. 573; Milner v. Noel, 43 
Ind. 324; Sullivan v. Frink, 3 Iowa 
66; Galbreath's Adrar. v. Galbreath, 10 
Ky. L. 935 ; Dreyfous v. Hart, 36 La. 
Ann. 929; McKinney v. Page, 32 
Maine 513; Wilson v. Boor, 40 Md. 
483; Hills v. Home Ins. Co., 129 
Mass. 345; Hewitt v. Reed City, 124 
Mich. 6, 82 N. W. 616, 50 L. R. A. 
128; Dewey v. Leonard, 14 Gil. 
(Minn.) 120; Hyeronimus v. Al- 
lison, 52 Mo. 102; Rand v. Reding- 
ton, 13 N. H. 72, 38 Am. Dec. 475; 
Veghte V. Hoagland, 10 N. J. Eq. 
45; Halstead v. Seaman, 82 N. Y. 
27, yi Am. Rep. 536 ; Perry v. Green- 
wich Ins. Co., 137 N. Car. 402, 49 
S. E. 889; Speer v. Bidwell, 44 Pa. 
St. 23; Frederic v. Margwarth, 200 
Pa. St. 156, 49 Atl. 881 ; David Har- 
lev Co. V. Barnefield, 22 R. I. 267, 47 
Atl. 544; Shinnie v. Coil, 1 McCord 
Eq. (S. Car.) 478; Aycock v. Doty, 
1 Tex. App. Civ. Cas.. § 221 ; Wood- 
worth V. McGovern, 52 Vt. 318; Ship- 
man v. Fletcher, 82 Va. 601; Mc- 
Donald V. Lewis, 18 Wash. 300, 51 
Pac. 387; Fluharty v. Beatty, 22 W. 
Va. 698; Donaldson v. Buhlman, 134 
Wis. 117, 113 N. W. 638, 114 N. W. 
"431. See also. In re Curtis, 64 Conn. 
501, 30 Atl. 769, 42 Am. St. 200; Hart- 
ford F. Ins. Co. V. Bonner Mercan- 
tile Co., 44 Fed. 151, 11 L. R. A. 
623 ; Edwards v. Hartshorn, 72 Kans. 
19, 82 Pac. 520, 1 L. R. A. (N. S.) 
1050 and note; Brush v. Fisher, 70 
Mich. 469, 38 N. W. 446, 14 Am. St. 
510; Vega Stmship. Co. v. Consoli- 
dated Elevator Co., 75 Minn. 208, 



n N. W. 973, 43 L. R. A. 843, 74 Am. 
St. 484 ; Corey Coal Co. v. New York 
&c. Coal Co., 231 Pa. 24, 79 Atl. 
812. See, Shawhan v. Baker (Mo.), 
150 S. W. 1096. 

"^Strong v. Beroujon, 18 Ala. 168; 
Orme v. Burney, 95 Ga. 418, 22 S. E. 
diZ; Russell v. Smith, 87 Ind. 457; 
Downey v. Atchison T. & S. F. R. 
Co., 60 Kans. 499, 57 Pac. 101 ; Stin- 
son v. Davis, 20 Ky. L. 1942, SO S. 
W. 550; Strong v. Strong, 12 Gush. 
(Mass.) 135; Hyeronimus v. Allison, 
52 Wo. 102; Craft v. Thompson, 51 
N. H. 536; Smith v. Cooley, 5 Daly 
(N. Y.) 401; Cothran v. Knox, 13 
S. Car. 496 ; Stephenson v. Oatman, 
3 Lea (Tenn.) 462; Taber v. Jenny, 
1 Sprague (U. S.) 315; Fed. Cas. 
13720; Woodworth v. McGovern, 52 
Vt. 318; Wheeling Gas Co. v. Wheel- 
ing, 5 W. Va. 448. 

•^Bumpass v. Webb, 4 Port. (Ala.) 
65, 29 Am. Dec. 274; Baker v. Crock- 
ett, Hardin (Ky.) (2d ed.) 396; Rand 
V. Redington, 13 N. H. 72, 38 Am. 
Dec. 475; Smith v. Cooley, 5 Daly (N. 
Y.) 401 ; Perry v. Greenwich Ins. Co., 
137 N. Car. 402. 49 S. E. 889. 

"Seaton v. Kendall, 171 111. 410, 
49 N. E. 561 ; Flatter v. McDermitt, 
25 Ind. 326; Bryant v. Levy, 52 La. 
Ann. 1649, 28 So. 191; Stewart v. 
Waldron, 41 Maine 486; Witz v. 
Tregallas, 82 Md. 351, ii Atl. 718; 
Brown v. Bellows, 4 Pick. (Mass.) 
179; Jenkins v. Meagher, 46 Miss. 
84; Neely v. Buford, 65 Mo. 448; 
Plummer v. Sanders, 55 N. H. 23; 
Hart V. Kennedy, 47 N. J. Eq. 51, 
20 Atl. 29 ; Herrick v. Blair, 1 Tohns. 
Ch. (N. Y.) 101 ; Cutting v. Carter, 
29 Vt. 72; Miller v. Miller, 99 Va. 
125, 37 S. E. 792. 

" See § 2957, and cases cited in 
note 3. 



225 



AWARD. 



2980 



dence/^ or the hearing of evidence in absence of a party without 
his consent," and the Hke. Usually, in the absence of fraud or 
misconduct of the parties or the arbitrators, the discovery of new 
evidence is not ground to set aside the award," especially if due 
diligence was not used to produce such evidence at the former 
hearing.^* Where the subject-matter of the award is illegal, the 
award itself is illegal and unenforcible.^^ The right, to impeach 
or attack an award may be waived.^" Laches may be interposed 
as a defense to a suit to set aside an award.^"- 

§ 2980. Impeachment of award — Method. — In any action 
on an award, a defense apparent on its face may be set up.^^ At 
common law, an award not void could not be set aside by extrinsic 
proof of fraud, mistake, partiality, or the like.'^ Under statutes 



^^ See § 29SS and cases cited under 
note 92. Cohn v. Wemme, 47 Ore. 
146, 81 Pac. 981, 8 Am. & Eng. Ann. 
Cas. 509 and note. 

"Jackson v. Roane, 90 Ga. 669, 16 
S. E. 650, 35 Am. St. 238. See § 2958 
and cases cited in notes 35 and 36. 

" Allen V. Ranney, 1 Conn. 569 ; 
Sanborn v. Davis, 5 N. H. 389; 
Williams V. Danziger, 91 Pa. St. 232. 

"Eardley v. Otley, 2 Chit. 42, 18 
E. C. L. 493; Dulin v. Caldwell, 29 
Ga. 362; Elliott v. Adams, 8 Blaclcf. 
(Ind.) 103; Coolv's Exr. v. McRob- 
ert's Admr., 5 Ky. L. (abstract) 
764; Todd v. Barlow, 2 Johns Ch. (N. 
Y.) 551; Aubel v. Ealer, 2 Bing. 
(Pa.) 582 note. 

" Singleton v. Benton, 114 Ga. 548, 
40 S. E. 811, 58 L. R. A. 181; Har- 
rington V. Brown, 9 Allen (Mass.) 
S79; Hall v. Kimmer, 61 Mich. 269, 
28 N. W. 96, 1 Am. St. 575 ; Lum v. 
Fauntleroy, 80 Miss. 757, 32 So. 290, 
92 Am. St. 620; Maybin v. Coulon, 
4 Dall. (U. S.) 298, 1 L. ed. 841 ; Fain 
V. Headerick, 4 Cold. (Tenn.) 327. 

=" Dunham Lumber Co. v. Holt, 
124 Ala. 181, 27 So. 556, 123 Ala. 
336, 26 So. 663 ; Fox v. Hazelton, 10 
Pick. (Mass.) 275; Bradstreet v. 
Pross, 90 Ohio Dec. (reprint) 154, 11 
Wkly. L. Bui. 117, 15 Cine. L. Bui. 
397. 17 Cine. L. Bui. 139; Cuncle v. 
Dripps, 3 Pen. & W. (Pa.) 291, 23 
Am. Dee. 84; Williams v. Danziger, 
91 Pa. St. 232; Waisner v, Waisner, 

IS— Contracts, Vol. 4 



15 Wyo. 420, 89 Pac. 580, 123 Am. 
St. 1081. 

''^Willingham v. Harrell, 36 Ala. 
583 ; Beesen v. Elliott, 1 Del. Ch. 368 ; 
Hite V. Hote, 1 B. Mon. (Ky.) 177; 
Eddy's Exr. v. Northup, 15 Ky. L. 
434, 23 S. W. 353 ; Plymouth v. Rus- 
sell Mills, 7 Allen (Mass.) 438; 
George v. Johnson, 45 N. H. 456; 
Bispham v. Price, 15 How. (U. S.) 
162, 14 L. ed. 644; Head v. Muir, 3 
Rand. (Va.) 122. 

■'^ Elliott Ev., § 1665; Wilkes v. 
Cotter, 28 Ark. 519; Clark v. Goit, 
1 Kans. App. 345, 41 Pac. 214; Bean 
V. Farnam, 6 Pick. (Mass.) 269; 
Truesdale v. Straw, 58 N. H. 207; 
Ruckman v. Ransom, 35 N. J. L. 
565; Owen v. Boerum, 23 Barb. (N. 
Y.) 187; Bryant v. Fisher, 85 N. 
Car. 69; David Harley Co. v. Barne- 
field, 22 R. I. 267, 47 Atl. 544; Meloy 
V. Dougherty, 16 Wis. 269. 

°^ See also, Georgia Home Ins. Co. 
V. Kline, 114 Ala. 366, 21 So. 958; 
Stewart v. Grier, 7 Houst. (Del.) 
378, 32 Atl. 328; Hardin v. Brown, 
27 Ga. 314; Newlan v. Dunham, 60 
111. 233; White Water Valley Canal 
Co. V. Henderson, 3 Ind. 3; Southard 
V. Steele, 3 T. B. Mon. (Ky.) 435; 
Weir V. West, 27 Kans. 650; Sisk v. 
Garey, 27 Md. 401 ; Strong v. Strong, 
9 Cush. (Mass.) 560; Michels v. 
Western Underwriters Assn., 129 
Mich. 417, 89 N. W. 56; Robertson v. 
Wells, 28 Miss. 90; Finley v. Fin- 



2980 



ARBITRATION AND AWARD. 



226 



allowing equitable defenses to be set up at law, matter which is 
an equitable ground for canceling or setting aside an award 
may be set up in an action at law."* And even at common law, 
it may be shown that the arbitrators had not pursued their au- 
thority, and had determined matters not submitted, or failed to 
determine matters submitted, and thus that no award was made 
within the terms of the submission.^" Where an award is pleaded 
in bar, as a defense, the plaintiff can only make such objection as 
would be proper in an action by the defendant to enforce, and 
may not show matters making the award voidable only,^° though 
he may show matters making it absolutely void."' A court of 
equity may set aside awards, or restrain their enforcement be- 
cause of fraud, corruption, mistake, or other extraneous causes 
of invalidity.^* Objections available as an adequate remedy at 



ley, 11 Mo. 624; Connecticut Fire Ins. 
Co. V. O'Fallon, 49 Nebr. 740, 69 
N. W. 118; Pierce v. Pierce, 60 N. 
H. 355 ; Ruckman v. Ransom, 35 N. 
J. L. S6S ; Elmendorf v. Harris, 5 
Wend. (N. Y.) 516, revg. 23 Wend. 
628, 35 Am. Dec. 587; Devereux v. 
Burgwin, 33 N. Car. 490; Phila. F. 
Assn. V. Allesina, 45 Ore. 154, 11 Pac. 
123: Cohn V. Wemme, 47 Ore. 146, 
81 Pac. 981, 8 Am. & Eng. Ann. Cas. 
508; Emerson v. Udall, 13 Vt. 477, 
Zl Am. Dec. 604; Doolittle v. Mal- 
com, 8 Leigh (Va.) 608, 31 Am. Dec. 
671 ; Canfield v. Watertown Fire Ins. 
Co., 55 Wis. 419, 13 N. W. 252. See 
also, Elliott Ev., § 1665 ; Hartford R 
Ins. Co. V. Bonner Mercantile Co., 44 
Fed. 151, 11 L. R. A. 623; Billrayer 
V. Flamburg-Bremen F. Ins. Co., 57 
W. Va, 42, 49 S. E. 901, 

"Elliott Ev., § 1665; Carson v. 
Earlywine, 14 Ind. 256; Thornton 
V. McCormick, 75 Iowa 285, 39 N. W. 
502; Downey v. Atchison T, & S. 
F, R, Co,, 60 Kans. 499, 57 Pac, 101 ; 
Hyeronimus v, Allison, 52 Mo, 102 ; 
Knowlton v. Mickles, 29 Barb. (N. 
Y.) 465; Caldwell v. Brooks Elev. 
Co., 10 N. Dak. 575, 88 N. W. 700; 
Bryraer v, Clark, 20 Ohio St. 231; 
Canfield v. Watertown F, Ins, Co., 
55 Wis. 419, 13 N. W. 252; Waisner 
V. Waisner, IS Wyo, 420, 89 Pac. 
580, 123 Am. St. 1081, 

'° Crane v. Barry, 54 Ga, 500; 
Stearns v. Cope, 109 111. 340; Jef- 



fersonville R. Co. v. Mounts, 7 Ind. 
669; Amos v. Buck, 75 Iowa 651, Zl 
N. W. 118; Clark v. Goit, 1 Kans. 
App. 345, 41 Pac, 214; McNear v. 
Bailey, 18 Maine 251 ; Gaylord v. Xor- 
ton, 130 Mass. 74; Hall v. Vanier, 6 
Nebr. 85 ; Ruckman v. Ransom, 35 N. 
J. L. 565; Hiscock v. Harris, 80 N. 
Y. 402; Gardner v. Masters, 56 N. 
Car. 462 ; Roop v, Brubacker, 1 
Rawle (Pa,) 304; Doohttle v. Mal- 
com, 8 Leigh (Va.) 608, 31 Am, Dec. 
671; McCord v. McSpaden, 34 Wis. 
541. 

=°Bulkley v. Stewart, 1 Day 
(Conn.) 130, 2 Am, Dec, 57; Massie v, 
Spencer, 1 Litt, (Ky,) 320; Johnson 
V, Knowlton, 35 Maine 467; Hart- 
well V. Penn F, Ins. Co,, 60 N, H. 
293; Owen v. Boerum, 23 Barb. (N. 
Y.) 187; Dougherty v, McWhorter, 7 
Yerg, (Tenn,) 239, 

''^Ingram v. Milnes, 8 East 445; 
Yarmouth v, Cumberland, 6 Greenl, 
(Maine) 21; Inslee v, Flagg, 26 N, J. 
L. 368, 69 Am, Dec, 580; Robinson 
V, Morse, 26 Vt. 392, 

=» MuIdroW V. Norris, 2 Cal. 74, 56 
Am. Dec. 313; Bridgeport v. Eisen- 
man, 47 Conn. 34 ; Waples v. Waples, 
1 Har, (Del,) 392; Tyler v, Steph- 
ens, 7 Ga, 278; Catlett v, Dougherty, 
114 111, 568, 2 N, E, 669; Hough v. 
Beard, 8 Blackf, (Ind.) 158; Mays- 
ville &c. Road Co. v. Waters, 6 Dana 
(Ky,) 62; Beam v, Macomber, 33 
?ilich, 127 ; Dewey v. Leonard, 14 Gil. 



227 



AWARD. 



2980 



law may not be set up in equity,'" nor after failure to pursue an- 
other adequate remedy is there a right to equitable relief.'" 
Equitable relief may be allowed in awards under a statute which 
provides for enforcement by entry of judgment." In certain 
instances where relief may be granted without infringing upon 
the functions of the arbitrators, equity may correct a clear mis- 
take in an award." Statutes giving courts summaiy power to 
enforce awards often give power to set aside,'' or imply such 
power.'* But if the statute names the grounds on which rehef 
will be granted, an award mav be set aside on no other.'^ Statu- 



(Minn.) 120; Rand v. Redington, 13 
N. H. 72, 38 Am. Dec. 475; Young 
V. Young, 6 N. J. Eq. 450; Bissell 
V. Morgan, 56 Barb. (N. Y.) 369; 
Conway v. Duncan, 28 Ohio St. 102 ; 
Hartupee v. Pittsburg, 131 Pa. St. 
535, 19 Atl. 507; Graham v. Bates 
(Tenn.), 45 S. W. 465; Emerson v. 
Udall, 8 Vt. 357, 13 Vt. 477, Z1 Am. 
Dec. 604; Coons v. Coons, 95 Va. 
434, 28 S. E. 885, 64 Am. St. 804; 
Wheeling Gas Co. v. Wheeling, 5 W. 
Va. 448; Pettibone v. Perkins, 6 Wis. 
616. See also, Metcalfe v. Ives, 1 
Atk. 63 ; Hartford F. Ins. Co. v. Bon- 
ner Mercantile Co., 44 Fed. 151, 11 
L. R. A. 623, 56 Fed. 378, S C. C. A. 
524. See, Shawhan v. Baker (Mo.), 
150 S. W. 1096. 

'"Miller v. Wetmore, 2 Root 
(Conn.) 488; Coxetter v. Huertas, 14 
Fla. 270 ; Mickles v. Thayer, 14 Allen 
(Mass.) 114; Perkins v. Giles, 50 N. 
Y. 228; Gardner v. Masters, 56 N. 
Car. 462; North Braddock v. Corey, 
205 Pa. St. 35, 54 Atl. 486; State v. 
Morehead, 22 R. I. 272, 47 Atl. 545; 
Meloy V. Dougherty, 16 Wis. 269. 
See Coons v. Coons, 95 Va. 434, 28 
S. E. 885, 64 Am. St. 804. 

"Thurmond v. Clark, 47 Ga, 500; 
Hubbard v. Hubbard, 61 111. 228; 
Elliott V. Adams, 8 Blackf. (Ind.) 
103; Craft v. Thompson, 51 N. H. 
536; Gardner v. Masters, 56 N. Car. 
462; Wheatley v. Martin's Admr., 6 
Leigh (Va.) 62. 

^Chambers v. Crook, 42 Ala, 171, 
94 Am. Dec. 637; Kearney v. Wash- 
tenaw Mut. F. Ins. Co., 126 Mich. 
246, 85 N. W. 733; Hyeronimus v. 
Allison, 52 Mo. 102; Wheeling Gas 



Co. V. Wheeling, 5 W. Va. 448. See 
also Waples v. Waples, 1 Harr. 
(Del.) 392; and Bright v. Ford, 11 
Heisk. (Tenn.) 252. 

'^Gregory v. Seamons, 1 Root 
(Conn.) 367; Eisenmeyer v. Sauter, 
n III. 515; Buys v. Eberhardt, 3 Mich. 
524; Davis v. Cilley, 44 N. H. 448, 
84 Am. Dec. 85; Perkins v. Giles, 50 
N. Y. 228, 53 Barb. (N. Y.) 342; 
Rounds V. Aiken Mfg. Co., 58 S. Car. 
299, 36 S. E. 714 ; Johnson v. Stalcup, 
4 Baxt. (Tenn.) 283; Moore v. Luck- 
ess' Ne.xt of Kin, 23 Grat. (Va.) 160. 
See Bullock v. Bergman, 46 Md. 270. 

'"Nolan v. Colorado &c. Min. Co., 
63 Fed. 930, 12 C. C. A. 585 ; Alfred 
V. Kankakee &c. R. Co., 92 III. 609; 
Bash V. Christian, 17 Ind. 290; Love 
v. Burns, 35 Iowa 150; Cooper v. An- 
drews, 44 Mich. 94, 6 N. W. 92; In 
re Burke, 191 N. Y. 437, 84 N. E. 
405 ; Tracy v. Herrick, 25 N. H. 381 ; 
Mock V. Bowman, 24 Ohio C. C. 27. 
See Thompson v. Barber (Kans.), 
125 Pac. 33. 

"^In re Curtis, 64 Conn. 501, 30 
Atl. 769, 42 Am. St. 200; Payne v. 
Metz, 14 Tex. 56. 

^In re Connor, 128 Cal. 279, 60 
Pac. 862; Dulin v. Caldwell, 29 Ga. 
362; Howel! v. Howell, 26 III. 460; 
Deford v. Deford, 116 Ind. 523, 19 N. 
E. 530 ; Russell v. Seery, 52 Kans. 
1Z6, 35 Pac. 812; Dorsey v. Jeoffray, 
3 Har. & M. (Md.) 121; Patrick 
V. Batten, 123 Mich. 203, 81 N. W. 
1081; Tavlor v. Scott, 26 Mo. App. 
249; Taylor v. Sayre, 24 N. J. L. 
647; Smith v. Cutler, 10 Wend. (N. 
Y.) 589, 25 Am. Dec. 580; Williams 
V. Danziger, 91 Pa. St. 232. 



2981 



ARBITRATION AND AWARD. 



228 



tory requirements for attack must be followed.''^ Usually, where 
an award is entered as a judgment of the court, there may be an 
appeal from such judgment." A stipulation in the submission 
not to appeal, may bind as to the merits;''* yet such agreement 
may not oust the courts of jurisdiction.^^ Appellate courts will 
not consider objections not apparent on the record,*" nor objec- 
tions not jurisdictional, which were not presented in the lower 
court.*^ 

§ 2981. Performance of award. — If the duties imposed by 
the award upon one party are to be performed as a condition pre- 
cedent to or at the same time with those imposed on the other, 
the former cannot enforce the award until he has performed or 
offered to perform,*" unless his performance has been prevented 
by the refusal of the other.*^ But if acts are to be performed by 



"Anderson v. Taylor, 41 Ga. 10; 
Shores v. Bowen. 44 Mo. 396; El- 
mendorf v. Harris, S Wend. (N. Y.) 
516, revd. 23 Wend. (N. Y.) 628, 
35 Am. Dec. 587 ; Montgomery Coun- 
ty V. Carey, 1 Ohio St. 463. 

^'Fairchild v. Doten, 42 Cal. 125; 
Waterbury Blank Book Mfg. Co. v. 
Hurlburt, 73 Conn. 715, 49 Atl. 198; 
Nolan V. Colo. &c. Min. Co., 63 Fed. 
930, 12 C. C. A. 585; Rogers v. 
Holden, 13 111. 293 ; Anderson v. An- 
derson, 65 Ind. 196; Lyman v. Arms, 
5 Pick. (;\Iass.) 213; Person v. 
Leathers (Miss.), 19 So. 582; Holub 
V. Mitchell, 42 Nebr. 389, 60 N. W. 
596. See also, Messick v. Ward, 1 
Grant (Pa.) 437; King v. Grey, 31 
Tex. 22, and South Carolina R. Co. 
V. Moore, 28 Ga. 398, 73 Am. Dec. 
778, 

^'Struthers v. Clark, 40 Iowa 508; 
Daniels v. Willis. 7 Minn. 374; Hos- 
tetter's Appeal, 92 Pac. 132; Skagit 
V. Trowbridge, 25 Wash. 140, 64 Pac. 
901, 

'"Muldrow V, Norris, 2 Cal, 74, 56 
Am. Dec. 313 ; Aycock v. Doty, 1 Tex. 
App. Civ. Cas., § 221. 

"Shult V, Travis, Ky. Dec, 140; 
Ward V. American Bank, 7 Mete. 
(Mass.) 486; Person v. Leathers 
(Miss,), 19 So, 582; Poole v, John- 
ston, 32 Him (N. Y.) 215; Shisler 
v, Keavy, 75 Pa, St. 79, See also, the 
following cases : Lamar v, Nich- 



olson, 7 Port. (Ala.) 158; In re Con- 
nor, 128 Cal. 279, 60 Pac. 862; Bun- 
tain v. Curtis, 27 111. 374; Forman 
Lumber Co. v. Ragsdale, 12 111, App, 
441; Dundon v. Starin, 19 Wis. 261. 
"Callahan v. McAlexander, 1 Ala. 
366; Mobile Bay Road Co. v. Yeind, 

29 Ala. 325 ; McMillan v. James, 105 
111, 194; Jacobs v, Moffatt, 3 Blackf, 
(Ind.) 395; Hopkins v. Sodouskie, 1 
Bibb (Ky.) 148; Heglund v. Allen, 

30 Minn. 38, 14 N. W. 57; Fortune 
v, Killibrew, 86 Tex. 172, 23 S. W. 
976, 

"ElKott Ev„ § 1663; Jessee v. 
Cater. 25 Ala, 351 ; Dudley v, Thomas, 
23 Cal, 365; Leitch v, Beatty, 23 111. 
594 ; Gentry v. Barnet, 2 J. J. Marsh. 
(Ky.) 312; Comery v, Howard, 81 
Maine 421, 17 Atl, 318; Shearer v. 
Handy, 22 Pick, (Mass,) 417; Brig- 
ham V, Holmes, 14 Allen (Mass,) 
184; Skillings v. Coolidtie, 14 Mass. 
43; Hugg V, Collins, 18 N, J, L. 294; 
Huy V. Brown, 12 Wend. (N. Y.) 
591 ; Parrish v. Higginbotham, 39 
Ore. 598, 65 Pac. 984 ; McNeil v. Ma- 
gee, 5 Mas, (U, S,) 244, Fed, Cas, 
No, 8915 ; Gray v. Reed, 65 Vt, 178, 
26 Atl, 526, 

^Elliott Evidence, § 1663: Jesse v. 
Cater, 28 Ala. 475; Giles &c, Co. v. 
Recamier :Mfg. Co,, 14 Daly (N. Y,) 
475; Jones v, Penn, R, Co,, 143 Pa. 
St, 374, 22 Atl, 883 ; Bavne v, Morris, 
1 Wall, (U, S,) 97, 17 L ed. 495. 



229 



AWARD. 



§ 2981 



both, and there is no necessary connection or dependence between 
them, the plaintiff is not compelled to perform his part before 
he can bring action to compel the other to perform,** for in such 
case, their remedies are mutual/^ Where the performance of 
alternatives is awarded, the performance of either is sufficient.*' 
Where an award is unconditional, for the payment of money, no 
demand'for payment is necessary before suit,*' but it is held that 
a demand is necessary where an act other than the unconditional 
payment of money is awarded.*^ Performance is compliance 
with the directions of the award as far as possible, and what 
may be performance in a particular case depends, of course, upon 
the terms of the award. *° A tender of performance by one party, 
which is refused by the other party, is sufficient for the first party 
to sue.'*" But where a party refuses a tender of performance of 
one of several things awarded, the party offering to perform is 
not excused from doing the other things awarded. ^^ 



** Elliott Ev., § 1663; Dudley v. 
Thomas, 23 Cal. 365 ; Hopson v. Doo- 
little, 13 Conn. 236; MacDonald v. 
Bond, 195 111. 122, 62 N. E. 881; 
Bakes V. Bass Foundry &c. Works, 
129 Ind. 185, 28 N. E. 319; Groat v. 
Pracht, 31 Kans. 656, 3 Pac. 274; 
Hart V. Scheible, 15 Ky. L. 782; 
Duren v. Getchell, 55 Maine 241; 
Loring v. Whittemore, 13 Gray 
(Mass.) 228; Flanders v. Chamber- 
lain, 24 Mich. 305; Hamlin v. Duke, 
28 Mo. 166; Girdler v. Carter, 47 N. 
H. 305; Hofifman v. Hoffman, 26 N. 
J. L. 175; Brazill v. Isham, 12 N. Y. 
9; Moore v. Austin, 85 N. Car. 179; 
Schoff V. Bloomfield, 8 Vt. 472; Mc- 
Court V. McCabe, 46 Wis. 596, 1 N. 
W. 192. See also, Gascoyne v. Ed- 
wards, 1 Y. & J. 19, 30 Rev. Rep. 
756. 

'"Duren v. Getchell, 55 Maine 241; 
Hamlin v. Duke, 28 Mo. 166. 

"Lexington v. Williamson (Ky.), 
107 S. W. 717; Hanson v. Webber, 
40 Maine 194. 

"Elliott Ev., § 1662; Ehrman v. 
Stanfield, 80 Ala. 118; Dudley v. 
Thomas, 23 Cal. 365 ; Blood v. Shine, 
2 Fla. 127; Russell v. Smith, 87 Ind. 
457; Slack v. Price, 1 Bibb, (Ky.) 
272; Plummer v. Morrill, 48 Maine 



184; Parsons v. Aldrich, 6 N. H. 264; 
Nichols V. Rensselaer County Mut. 
Ins. Co., 22 Wend. (N. Y.) 125. See 
also. Purser v. Prowd, Cro. Jac. 423. 
■"Pomroy v. Gold, 2 Mete. (Mass.) 
500; Ex parte Wallis, 6 Cow. (N. Y.) 
581 ; Knight v. Carey, 1 Cow. (N. Y.) 
39. See Parmelee v. Allen, 32 Conn. 
115. 

*" Parsons v. Parsons, Cro. Eliz. 
211; Hanson v. Boothman, 13 East 
22; Sharpe v. Hancock. 7 Man. & 
Gran. 354, 49 E. C. L. 354 ; Dodding- 
ton v. Bailward, 5 Bing. N. Cas. 
591, 7 Dowl. P. C. 640, 8 L. J. C. P. 
331, n Scott 733, 35 E. C. L. 318; 
Wynne v. Wynne, 1 Dowl. (N. S.) 
723, 11 L. J, C. P. 206, 4 Man. & 
Gran. 253, 3 Scott N. R. 435, 43 E. 
C. L. 137; Gray v. Gray, Cro. Jac. 
525 ; Bird v. Routh, 88 Ind. 47 ; Webb 
V. Fish, 4 N. J. L. 371; Preston v. 
Whitcomb, 11 Vt. 47. 

°° Squire v. Grevett, 2 Ld. Raym. 
961 ; Lincoln v. Cook, 2 Scam, (III.) 
61; Smith v. Stewart, S Ind. 220: 
Preston v. Whitcomb, 11 Vt. 47; 
Wood V, Bangs, 2 Pen. (Del.) 435, 
48 Atl. 189. 

■" Gray v. Reed, 65 Vt. 178, 26 Atl. 
526. 



§ 2982 



ARBITRATION AND AWARD. 



230 



§ 2982. Enforcement of award. — An award directing the 

payment of money may be enforced by an action ex contractu on 
the award.^^ And since an award is in the nature of a contract 
between the parties to perform the acts directed, an action will 
lie for damages for refusal to perform.''^ At common law, the 
only way to enforce an award not made a rule of court is by an 
action on it, or on the bond of submission."* Even though made 
a rule of court, and capable of summary enforcement, an award 
may be enforced by action. '^'^ It is held that the limitation of ac- 
tions upon awards is governed by the statute fixing limitations 
upon actions on specialties."^ Assumpsit may be brought upon 
an award,"^ and debt will lie upon an award. "^ In an action on 
an award, it is held that a complaint, declaration or petition is 
sufficient which alleges a mutual submission of differences be- 
tween parties,"" shows an award made in pursuance to and in 



==See Ellion Ev„ § 1657; Francis 
V. Ames, 14 Ind, 251; Webb v. Zel- 
ler, 70 Ind. 408; North Yarmouth v. 
Cumberland, 6 Greenl. (Maine) 21; 
McCune v. Lytle, 197 Pa. St. 404, 
47 Atl. 190. See also, Symonds v. 
Mills, 8 Taunt. 526, 4 E. C. L. 261. 

"' Gray v. Reed, 65 Vt. 178, 26 Atl. 
526. 

"Weinz v. Dopier, 17 111. Ill; 
Titus V. Scantling, 4 Blackf. (Ind.) 
89; Shockey's Admr. v. Glasford, 6 
Dana (Ky.) 9; Gerry v. Eppes, 62 
Maine 49; Tynan v. Tate, 3 Nebr. 
388; State v. Jersey City Board of 
Finance, 39 N. J. L. 629; Smith v. 
Compton, 20 Barb. (N. Y.) 262; 
Rank v. Hill, 2 Watts & S. (Pa.) 56, 
Zl Am. Dec. 483 ; Collins v. Oliver, 4 
Humph. (Tenn.) 438; Banert v. 
Eckert, 4 Wash. C. C. (U. S.) 325, 
Fed. Cas. 837 ; Waisner v. Waisner, 
15 Wyo. 420, 89 Pac. 580, 123 Am. St. 
1081. See also, Peele v. North & S. 
Carolina R. Co. (N. Car.), 74 S. E. 
592. 

'=' Wilkes V. Cotter, 28 Ark. 519; 
Smith V. Douglass, 16 111. 34; Good- 
wine V. Miller, 32 Ind. 419 ; Duren v. 
Getchell, 55 Maine 241 ; Burnside v. 
Whitney, 24 Ba-b. (N. Y.) '632, affd. 
21 N. Y. 128; Swasey v. Lavcock, 1 
Handy (Ohio) 334, 12 Ohio Dec. 170. 

"^ Smith V. Lockwood, 7 Wend. (N. 
Y.) 241 ; Green & C. St. Pass. R. Co. 



V. Moore, 64 Pa. St. 79; Rank v. Hill, 

2 Watts & S. (Pa.) 56, Zl Am. Dec. 
483; Halnon v. Halnon, 55 Vt. 321. 

■^Averill v. Buckingham, 36 Conn. 
359; Fooks v. Lawson, 1 Marv. 
(Del.) 115, 40 Atl. 661; McDonald v. 
Bond, 96 111. App. 116, 195 111. 122, 
62 N. E. 881; Woodbury v. Northy, 

3 Greenl. (Maine) 85, 14 Am. Dec. 
214; Bates v. Curtis, 21 Pick. (Mass.) 
247; Whitcher v. Whitcher, 49 N. H. 
176, 6 Am. Rep. 486; Parsons v. 
Aldrich, 6 N. H. 264; Parrish v. 
Strickland, 52 N. Car. 504; Taylor v. 
St. Johnsbury & L. C. R. Co., 57 Vt. 
106. 

''See Elliott Ev., § 1657; Mc- 
Cargo V. Crutcher, 23 Ala. 575 ; 
Shockey's Admr. v. Glasford, 6 
Dana (Ky.) 9; Barrett v. Twombly, 
23 Maine Hi ; Gerry v. Eppes, 62 
Maine 49; Bean v. Farnam, 6 Pick. 
(Mass.) 269; Williams v. Williams, 
11 Sm. & M. (Miss.) 393; Myers v. 
Dixon, 2 Hall (N. Y.) 456; Thomp- 
son V. Childs, 29 N. Car. 435 ; Tullis' 
Admrs. v. Sewell, 3 Ohio 510; Hume 
V. Hume, 3 Pa. St. 144; Matthews v. 
Matthews, 2 Curt. (U. S.) 105, Fed. 
Cas. 9288; Shelburn v. Eldridge, 10 
Vt. 123. 

™ Brazier v. Jones, 8 Barn. & Cr. 
124, 15 E. C. L. 69 ; Littleton v. Pat- 
ton, 112 Ga. 438, 37 S. E. 755; IMiHer 
V. Buckeye Mut. Fire Ins. Co., 2 111. 



231 



AWARD. 



§ 2982 



conformity with the submission, and made within the time Hmited 
by submission,"" sets out the part of the award on which the 
plaintiff rehes,"^ shows nonperformance by the defendant,"^ and 
performance by the plaintiff, or readiness to perform the acts 
required by him to be performed."^ At the trial, the plaintiff 
must prove the submission,"* and an award in conformity."' An 
award set up in bar of a claim must be pleaded substantially as in 
a declaration or complaint in an action thereon,"" save that per- 
formance or offer to perform need not ordinarily be alleged by 
the pleader."^ Though an agreement to submit cannot be specif- 
ically enforced,"^ it is the established rule that equity will spe- 



App. 12s ; Shockey's Admr. v. Glas- 
ford, 6 Dana (Ky.) 9; Ogle v. Tay- 
loe, 49 Md. 158; Keep- v. Goodrich, 12 
Johns. (N. Y.) 397. 

""Littleton V. Patton, 112 Ga. 438, 
37 S. E. 755 ; Mann v. Richardson, 66 
111. 481; Munro v. Alaire, 2 Caines 
(N. Y.) 320; McCreary v. Taggart, 
2 S. Car. 418; Martin v. State, 51 
Wis. 407, 8 N. W. 248; Gear v. 
Bracken, 1 Pin. (Wis.) 249. See also, 
Pascoe V. Pascoe, 3 Bing. N. Cas. 
898, 32 E. C. L. 412; Skinner v. An- 
drews, 1 Saund. 169. 

"Perry v. Nicholson, 1 Burr. 278; 
Haywood v. Harmon, 17 111. 477; 
Shockey's Admr. v. Glasford, 6 
Dana (Ky.) 9; Finley v. Finley, 11 
Mo. 624; McKinstry v. Solomons, 2 
Johns. (N. Y.) 57, 13 Johns. (N. Y.) 
27; Doolittle v. Malcom, 8 Leigh 
(Va.) 608, 31 Am. Dec. 671. See San- 
ford V. Wood, 49 Ind. 165 (holding 
copy of award must be filed with 
complaint). 

"'Littleton v. Patton, 112 Ga. 438, 
37 S. E. 755 ; Lent v. New York & M. 
R. Co., 130 N. Y. 504, 29 N. E. 988. 

°^ Fleming v. Chinowith, Ky. Dec. 
17; Finley v. Finley, 11 Mo. 624; Huy 
V. Brown, 12 Wend. (N. Y.) 591; 
Hugg V. Collins, 18 N. J. L. 294; 
Parrish v. Higginbothara, 39 Ore. 598, 
65 Pac. 984; Matthews v. Matthews, 
2 Curt. (U. S.) 105, Fed. Cas. 9288. 
This rule does not apply where the 
acts to be performed by the parties 
are in no wise dependent, nor one not 
a condition precedent to the other 
Gentry v. Barnet, 2 J. J. Marsh (Ky ) 
312 ; Duren v. Getchell, 55 Mame 241 ; 



Loring v. Whittemore, 13 Graj, 
(Mass.) 228; Finley v. Finley, 11 Mo. 
624; Nichols v. Rensselaer County 
Mut. Ins. Co., 22 Wend. (N. Y.) 125. 

"See Elhott Ev., §§ 1656, 1658; 
Ferrer v. Oven, 7 B. & C. 427, 6 L. 
J. K. B. (O. S.) 28, 1 M. & R. 222, 
14 E. C. L. 195; Fooks v. Lawson, 1 
Marv. (Del.) 115, 40 Atl. 661, 1 Hard. 
(Del.) 115; Boots v. Canine, 58 Ind. 
450; Chicago & Canada Southern R. 
Co. V. Peters, 45 Mich. 636, 8 N. W. 
584; Williams v. Williams, 11 Sm. & 
M. (Miss.) 393; Collins v. Freas, 71 
Pa St 493 

"'See Elliott Ev., §§ 1656, 1658; 
Anderson v. Miller, 108 Ala. 171, 19 
So. 302; Fooks v. Lawson, 1 Marv. 
(Del.) 115, 40 Atl. 661; Hoffman v. 
Hoffman, 26 N. J. L. 175. 

°° Armstrong v. Webster, 30 111. 
333; Brown v. Perry, 14 Ind. 32; 
Dougherty v. Stewart, 43 Iowa 648; 
Milner v. Turner's Heirs, 4 T. B. 
Mon. (Ky.) 240; Yingling v. Hohl- 
hass, 18 Md. 148 ; Gihon v. Levy, 9 N. 
Y. Super. Ct. 176; Brazill v. Isham, 
12 N. Y. 9; Rogers v. Tatum, 25 N. 
J. L. 281 ; Young v. Shook, 4 Rawle 
(Pa.) 299; Harrell v. Merridith, 36 
Tex. 255; Martin v. Rexroad, 15 W. 
Va. 512. 

" Smith V. Stewart, 5 Ind. 220 ; Jes- 
siman v. Haverhill &c. Iron Manu- 
factory, 1 N. H. 68; Armstrong v. 
Masten, 11 Johns. (N, Y.) 189; 
Moore v. Austin, 85 N. Car. 179. But 
see Jesse v. Cater, 25 Ala. 351 ; and 
Littlefield v. Smith, 74 Maine 387. 

"' See cases cited in note 7, § 2941. 



298^ 



ARBITRATION AND AWARD. 



232 



cifically enforce an award, if it would compel specific perform- 
ance of an agreement between the parties in the same terms.'"' 
The general rules governing specific performance of other con- 
tracts apply to awards.'" In most jurisdictions in the United 
States, statutes provide for the enforcement of awards by entry 
of judgment thereon.'^ But for this remedy to be pursued, the 
award must fall within the scope of the statute,'" and statutory 
fequirements must have been complied with.'^ This statutory 



""Kirksey v. Fike, 27 Ala. 383, 62 
Am. Dec. 768; Whitney v. Stone, 23 
Cal. 275 ; Story v. Norwich & W. R. 
Co., 24 Conn. 94; Overby v. Thrasher, 
47 Ga. 10; Ballance v. Underhill, 3 
Scam. (111.) 4S3 ; Brown v. Burken- 
meyer, 9 Dana (Ky.) 159, 33 Am. 
Dec. 541 ; McNear v. Bailey, 18 Maine 
251; Witz V. Tregallas, 82 Md. 351, 
33 Ad. 718; Jones v. Boston Mill 
Corp., 4 Pick. (Mass.) 507, 6 Pick. 
(Mass.) 148, 16 Am. Dec. 358; Mem- 
phis &c. R. Co. V. Scruggs, 50 Miss. 
284; Page v. Foster, 7 N. H. 392; 
Maurv v. Post, 55 Hun (N. Y.) 454, 
8 N. V. S. 714; Thompson v. Deans, 
59 N. Car. 22; Davis v. Havard, 15 
Serg. & R. (Pa.) 165, 16 Am. Dec. 
537; McNeil v. Magee, 5 Mason (U. 
S.) 244, Fed. Cas. 8915; Akely v. 
Akely. 16 Vt. 450; Smith v. Smith, 
4 Rand. (Va.) 95. 

" Nickels V. Hancock, 7 DeG. M. & 
G. 300; Memphis &c. R. Co. v. 
Scruggs, SO Miss. 284. See ch. 106 on 
Specific Performance of Contracts. 

"Crook V. Chambers, 40 Ala. 239; 
Williams v. Walton, 9 Cal. 142; 
Walker v. Walker, 25 Ga. 257 ; In re 
Burks, 191 N. Y. 437, 84 N. E. 405, 
117 App. Div. (N. Y.) 477, 102 N. 
Y. S. 785 ; Perrigo Gold Min. &c, Co. 
V. Grimes, 2 Cold. (Tenn.) 651. See 
also, Davis v. Bond, 14 Ind. 7; An- 
derson V. Beebe, 22 Kans. 768 ; Dono- 
van V. Owen, 10 La. Ann. 463 ; 
Shriver v. State, 9 Gill & J. (Md.) 1 ; 
Detroit v. Jackson, 1 Doug. (Mich.) 
106; Johnston v. Paul, 23 Minn. 46; 
Handy v. Cobb, 44 Miss. 699; Swee- 
ney V. Vaudry, 2 Mo. App. 352 ; 
Bradstreet v. Pross, 9 Ohio Dec. (re- 
print) 154, 11 Wklv. L. Bui. 117, IS 
Cine. L. Bui. 397, 17 Cine. L. Bui. 
1.39; Graham v. Pence, 6 Rand. (Va.) 
529; Tennant v. Divine, 24 W. Va. 
387. 



'" Davis V. McConnell, 3 Stew. 
(Ala.) 492; Gunter v. Sanchez, 1 Cal. 
45; Coxetter v. Huertas, 14 Fla. 270; 
Halloran v. Bray, 29 Ga. 422; Weinz 
V. Dopier, 17 111. Ill; Stanwood v. 
Mitchell, 59 Maine 121; Eaton v. 
Arnold, 9 Mass. 519; Sherron v. 
Wood, 10 N. J.. L. 7 ; Camp v. Root, 
18 Johns. (N. Y.) 22: Jackson v. Mc- 
Lean, 96 N. Car. 474, 1 S. E. 785; 
Climenson v. Climenson, 163 Pa. St. 
451, 30 .\tl. 148; Owens v. Withee, 3 
Tex. 161. See also, Hartford Fire 
Ins. Co. V. Bonner Mercantile Co., 44 
Fed. 151, 11 L. R. A, 623, afifd. 56 
Fed. 378, 5 C. C. A. 524. 

"Dudley v. Farris, 79 Ala. 187; 
Collins V. Karatopsky, 36 Ark. 316; 
Kreiss v. Hotaling, 96 Cal. 617, 31 
Pac. 740 ; Readdy v. Tampa Electric 
Co., 51 Fla. 289, 41 So. 535; Osborn 
& Walcott Mfg. Co. v. Blanton, 109 
Ga. 196, 34 S. E. 306; Marline v 
Harvev, 12 111. App. 587; Coffin v 
Woody, 5 Blackf. (Ind.) 423; Love 
V. Burns, 35 Iowa 150; IMorgan v. 
Smith, 33 Kans. 438, 6 Pac. 569 ; Car 
son V. Carson, 1 Mete. (Ky.) 434 
Field V. Bisscll, 36 Maine 593 ; Nay v, 
Boston & W. St. R. Co., 192 Mass 
517, 78 N. E. 547 : Gibson v. Burrows, 
41 Mich. 713, 3 N. W. 200 ; Barney v 
Flower, 27 Minn. 403, 7 N. W. 823 
Burkland v. Johnson, SO Nebr. 858, 
70 N. W. 388; Steel v. Steel. 1 Nev. 
27; Goodsell v. Phillips, 49 Barb. (N. 
Y.) 353; Gessner v. Minneapolis &c. 
R. Co., IS N. Dak. 560, 108 N. W. 
786; Western Female Seminary v. 
Blair, 1 Disn. (Ohio) 370, 12 Ohio 
Dec. 677 ; Stokely v. Robinson, 34 Pa. 
St. 315: Anderson v. Ft. Worth, 83 
Tex. 107, 18 S. W. 483; Banert v. 
Eckert, 4 Wash. C C. (U. S.) 325, 
Fed Cas. 837: Lazell v. Houghton, 32 
Vt. 579; Darling- v. Darling, 16 Wis. 
644. 



^zz 



AWARD. 



§ 2982 



remedy is cumulative/^ and does not abrogate the common law, 
so in general, an award which is deficient for failure to comply 
with the statute may be enforced at common law,'^° and the com- 
mon-law remedy has even been allowed where the statutory one 
is available," but elsewhere it is held that the intent of parties to 
make a statutory award makes the statutory remedy exclusive." 
It is the general rule that notice to the opposite party is necessary 
before judgment is entered on an award." Statutory procedure 
to have judgment entered, which sometimes requires a motion for 
judgment or application within a certain time, should be fol- 
lowed.'" The judgment should conform to and follow the 



"Shaw V. State, 125 Ala. 80, 28 
So. 390; Wilkes v. Cotter, 28 Ark. 
519: Peachy v. Ritchie, 4 Cal. 205; 
McClelland v. Hammond, 12 Colo. 
App. 82, 54 Pac. 538; Webb v. Zeller, 
70 Ind. 408; Foust v. Hastings, 66 
Iowa 522, 24 N. W. 22 ; Thomasson v. 
Risk, 11 Bush (Ky.) 619; Day v. 
Hooper, 51 Maine 178; Galloway v. 
Gibson, 51 Mich. 135, 16 N. W. 310; 
Williams v. Perkins, 83 Mo. 379; 
Burkland v. Johnson, 50 Nebr. 858, 
70 N. W. 388; Dorr v. Hill, 62 N. H. 
506; New York Lumber &c. Co. v. 
Schnieder, 119 N. Y. 475, 24 N. E. 4; 
State V. Jackson, 36 Ohio St. 281; 
McCune v. Lytle, 197 Pa. St. 404, 47 
Atl. 190; Dockery v. Randolph (Tex. 
Civ. App.), 30 S. W. 270; Powers v. 
Douglass, 53 Vt. 471, 38 Am. Rep. 
699; Winne v. Elderkin, 2 Pin, 
(Wis.) 248, 1 Chand. (Wis.) 219, 52 
Am. Dec. 159. See also, Hartford 
Fire Ins. Co. v. Bonner Mercantile 
Co., 44 Fed. 151, 11 L. R. A. 623, affd. 
56 Fed, 378, 5 C. C, A, 524. 

"Lamar v. Nicholson, 7 Port. 
(Ala,) 158; Collins v. Karatopsky, 36 
Ark. 316; Kreiss v. Hotaling, 96 Cal. 
617, 31 Pac. 740; Osborn &c. Mfg. 
Co, V. Blanton, 109 Ga. 196, 34 S. E. 
306; Eisenmeyer v. Sauter, 77 111. 
515 ; Fink v. Fink, 8 Iowa 313"; Frost 
V. Smith's Heirs, 7 J. J. Marsh (Ky.) 
126; Day v. Hooper, 51 Maine 178; 
Shearer v. Mooers, 19 Pick. (Mass.) 
308; Sawyer v. McAdie, 70 Mich. 
386, 38 N. W. 292 ; Tyman v. Tate, 3 
Nebr. 388; Burnside v. Whitney, 21 
N. Y. 148; Gibbs v. Berry, 35 N, Car. 
388; Estes v. Phillips, 13 Ohio Dec. 



732, 2 Cine. Sup. Ct. (Ohio) 3; 
Climenson v. Climenson, 163 Pa. St. 
451, 30 Atl. 148; Myers v. Easter- 
wood, 60 Tex, 107; Darling v. Dar- 
ling, 16 Wis. 644. 

"Griggs V. Seeley, 8 Ind. 264 
Dickerson v. Tyner, 4 Blackf. (Ind,) 
253; Burnside v. Whitney, 21 N. Y, 
148; McCune v. Lytle, 197 Pa. St 
404, 47 Atl. 190. 

"Williams V. Walton, 9 Cal. 142 
Hepburn v, Jones, 4 Colo. 981 ; Bash 
V. VanOsdol, 75 Ind. 186; Sims v. 
Banta, 9 Ky. L. (abstract) 286; Sar- 
gent V. Hampden, 32 Maine 78; Deer- 
field V. Arms, 20 Pick, (Mass.) 480, 
32 Am. Dec. 228: Holdridge v. Sto- 
well, 39 Minn. 360, 40 N, W. 259; 
Beniamin v. Benjamin 5 Watts. & S. 
(Pa,) 562; Tacoma R. & Motor Co. 
V. Cummings, 5 Wash. 206, 31 Pac. 
747, 33 Pac. 507. See also, Erie Tel. 
&c, Co, V. Bent, 39 Fed. 409. 

'*Forman Lumber Co. v. Ragsdale, 
12 111. App. 441 ; Springfield & S, R. 
Co. V. Calkins, 90 Mo. 538, 3 S. W. 
82; Ex parte Wallis, 6 Cow. (N. Y.) 
581; Hubbell v. Baldwin, Wright 
(Ohio) 86; Brace v. Stacy, 56 Wis. 
148, 14 N. W. 5L See contra, Hart v. 
Stewart, 13 La. Ann. 37, and Kelly 
V. Morse, 3 Nebr. 224. 

™Carsley v. Lindsay, 14 Cal, 390; 
Hoggs V. Morse, 31 Cal. 128; Martin 
V. Bevan, 58 Ind. 282; Anderson v. 
Beebe, 22 Kans, 768; Laine v. Shrock, 
Walk. (Miss,) 316; Brace v. Stacy, 
56 Wis. 148, 14 N. W. 51, In re South- 
ern Pac, Co., 155 Fed. 1001; Nelson 
V, Hinesley, 3 Blackf. (Ind.) 432: 
Middleton v. Hume, 3 J. J. Marsh. 



§ 2982 



ARBITRATION AND AWARD. 



234 



award. ^'' Where a court improperly refuses to enter judgment 
on an award, it may be compelled by mandamus.*^ Execution 
lies on a judgment issued on award the same as on any other 
judgment.'^ In England and Canada and a few American juris- 
dictions, an award may be enforced by attachment/^ Where 
a bond is given to perform the award, action may be brought to 
recover the penalty of the bond, rather than on the award.'* 
Judgment on the award bars a suit on the bond.^° The party 
may elect to sue either on the award or on the bond.'° 



(Ky.) 221 ; In re Taylor, 9 Mo. App. 
589; Alexander v. Witherspoon, 30 
Tex. 291. 

'° Dist. Tp. of Little Sioux v. Inde- 
pendent Dist. of Little Sioux, 60 Iowa 
141, 14 N., W. 201. See also, Lamar 
V. Nicholson, 7 Post. (Ala.) 158; 
Rone V. Hynes, 7 Ky. L. 93 ; Nelson 
V. Andrews, 2 Mass. 164; Common- 
wealth V. Pejepscut, 7 Mass. 399; 
Bouck V. Bouck, 57 Minn. 490, 59 N. 
W. 547; Gunn v. Bowers, 126 Pa. St. 
552, 17 Atl. 893. 

■^Dudley v. Farris, 79 Ala. 187; 
Dorr V. Hill, 62 N. H. 506. 

''King V. Jemison, 33 Ala. 499; 
Caton V. MacTavish, 10 Gill. & J. 
(Md.) 192; Commonwealth v. 
Pejepscut, 7 Mass. 399; Coleman v. 
Lukens, 4 Whart. (Pa.) 347; Gal- 
lup V. Reynolds, 8 Watts (Pa.) 424. 

■"Burrows v. Guthrie, 61 111. 70; 
Shriver v. State, 9 Gill. & J. (Md.) 
1; Ex parte Wallis, 7 Cow. (N. Y.) 
522; Kunckle v. Kunckle, 1 Dall. 



(U. S.) 364, 1 L. ed. 178. See also, 
Tebutt V. Ambler, 2 Dowl. (U. S.) 
611 ; Kenyon v. Grayson, 2 Smith 61 ; 
Barnes v. McMartin, 5 U. C. Q. B. 
(O. S.) 143; Hoffman v. Westlecraft 
(N. J.), 79 Atl. 319. 

"See Elliott Ev., § 1657; Titus v. 
Scantling, 3 Blackf. (Ind.) ill, 4 
Blackf. 89; Shockey's Admr. v. Glas- 
ford, 6 Dana (Ky.) 9; Thompson v. 
Childs, 29 N. Car. 435. See also, 
Stewart v. Grier, 7 Houst. (Del.) 
378, 32 Atl. 328; Shroyer v. Bash, 57 
Ind. 349; Spear v. Smith, 1 Denio. 
(N. Y.) 464. 

"'Nolte V. Lowe, 18 111. 437. 

"Wilkes V. Cotter, 28 Ark. 519; 
Nolte V. Lowe, 18 111. 437; Titus v. 
Scantling, 4 Blackf. (Ind.) 89; 
Shockey's Admr. v. Glasford, 6 Dana 
(Ky.) 9; Ex parte Wallis, 7 Cowen 
(N. Y.) 522; Thompson v. Childs, 29 
N. Car. 435; Smallwood v. Mercer, 1 
Wash. (Va.) 290. 



TITLE THREE 

BAILMENTS. 



CHAPTER LXVIII. 



DEFINITIONS AND GENERAL PRINCIPLES. 



i 2985. 
2986. 
2987. 

2988. 
2989. 

2990. 



2991. 
2992. 

2993. 
2994. 
299S. 

2996. 



Definition of bailment. § 2997. 

Character of the relation. 

Origin of the law of bail- 2998. 
ment. 

Classification of bailments. 2999. 

The consideration which sup- 
ports the contract. 3000. 

Principles common to all bail- 
ments, and subject-matter of 3001. 
a bailment. 3002. 

Parties to a bailment. 3003. 

Delivery and acceptance of the 3004. 
property. 3005. 

Possession of the property. 3006. 

Bailor's title and rights. 

Bailee's estoppel to deny bail- 3007. 
or's title. 

Bailee's rights against third 
parties. 



Bailee's rights to use of prop- 
erty — Conversion. 

Expenditures upon property 
bailed. 

The bailor must not expose 
the bailee to danger. 

Care to be taken of property 
bailed. 

Bailee must act in good faith. 

Effect of special contract. 

Compound or mixed bailment. 

Redelivery. 

Termination of relation. 

Form of action and burden of 
proof. 

Distinction between bailment, 
and debt, sale, or gift. 



§ 2985. Definition of bailment. — A bailment may be de- 
fined as a contract by which the possession of personal property 
is temporarily transferred from the owner to another for the ac- 
complishment of some special purpose. There have been almost 
as many definitions of bailments as there have been writers upon 
the subject, but the one just given seems to be sufficiently definite 
and inclusive for the purposes of this article.^ 



^ Among other definitions of bail- 
ments are the following: "Bailment 
consists in the rightful holding of a 
chattel by some party, under an obli- 
gation to return or deliver it over (or 
in certain instances hold as full 
owner), after some special purpose 
is accomplished." Schouler Bailments 



(3d ed.), § 2. "A bailment is a trans- 
fer of the possession of personal 
property, without a transfer of 
ownership, for the accomplishment 
of a certain purpose, whereupon the 
property is to be redelivered or deliv- 
ered over to a third person." Hale 
Bailments, § 1. "A bailment is a con- 



235 



2986 



BAILMENTS. 



235 



§ 2986. Character of the relation. — A bailment relation is 
a contract relation, the contract often, however, being implied 
and not express. A bailment is a real contract, that is, a con- 
tract based upon a thing and the transfer of its possession, rather 
than a consensual agreement or contract based on mutual prom- 
ises.^ The term "bailment" comes from the Norman word 
"bailer", to deliver, and an actual, implied or constructive de- 
livery of possession from the bailor of goods to the bailee 
and an actual, implied or constructive redelivery of such pos- 
session are elements essential to every bailment contract.^ 



tract relation resulting from the deliv- 
ery of personal chattels by the owner, 
called the bailor, to a second person, 
called the bailee, for a specific purpose, 
upon the accomplishment of which the 
chattels are ta be dealt with accord- 
ing to the owner's direction." God- 
dard Bailments, § 1. "A bailment is 
a delivery of a thing in trust for 
some special object or purpose, and 
upon a contract, expressed or im- 
plied, to conform to the object or 
purpose of the trust." Story Bail- 
ments, § 2. "Bailment, from the 
French bailler, to deliver, is de- 
livery of goods for some particular 
purpose, or on mere deposit, upon a 
contract express or implied, that, 
after the purpose has been per- 
formed, they shall be redelivered to 
the bailor, or otherwise dealt with 
according to his directions, or (as 
the case may be), kept till he re- 
claims them." Stephens Com. (1st 
Am. ed.) bk. 2, pt. 2, ch. S, p. 129. Of 
these definitions probably that of Hale 
is the most satisfactory. Those of 
Story, Goddard and Stephens make 
delivery to the bailee essential, yet in 
case of the finder of lost property, who 
is by all writers recognized as a bailee, 
there can be said to be no delivery, 
save by the merest fiction of law, 
while in such a case there is certainly 
a transfer of possession and a right- 
ful holding by the bailee. On the 
other hand, the definitions of Schedu- 
ler and Hale perhaps overemphasize 
the element of redelivery, for in 
some cases the bailment may be re- 
tained bv the bailee after the ac- 
complishment of the special purpose, 
and in many cases it is not returned 
to the owner, so tljat it seems more 



exact to say that the property bailed 
must be disposed of as the owner 
directs than to say that it must be 
delivered to the owner, or to a third 
party. Under some of the definitions 
of bailments the consignment of 
goods to a factor for sale would 
not constitute a bailment, because 
there is no redelivery, and there 
has been some conflict in the past 
as to whether this is a bailment, 
but it seems that in all its es- 
sentials it is. The definition given 
in the text makes the foundation of 
the relation rather the severance of 
possession from ownership than the 
delivery or redelivery, yet we believe 
that so far as delivery by the owner 
or redelivery to him is essential, 
they are included in the temporary 
transfer of possession for some 
special purpose, for such transfer 
implies that the possession is to re- 
turn to the owner after the special 
purpose has been accomplished. In 
j\Ir. Schouler's later work. Bail- 
ments Including Carriers (1905), 
§ 1, he says that "bailment may be 
said in a broad sense to consist in 
rightful possession of a chattel sev- 
ered from its ownership," and this is 
a very comprehensive and satisfactory 
definition. 

■ Street on Foundations of Legal 
Liability, vol, 2, ch. 1, p. 1, et seq., 
ch. 26. p. 251. ct seq. 

"Schouler Bailments (3d ed.), § 1; 
Van Zile Bailments (2d ed.), § 3; 
Goddard Bailments, § 11; Hale 
Bailments, p. ,30. See Bates v. Big- 
by, 123 Ga. 727. 51 S. E. 717; North- 
cutt V. State, 60 Tex. Cr. 259, 131 S. 
W. 1128. 



21^ DEFINITIONS AND PRINCIPLES. § 2987 

Only personal property can be the subject of a bailment, 
for actual manual possession of real property cannot be de- 
livered, and under the civil law only corporeal personal prop- 
erty could be bailed, on the ground that it alone admitted of the 
actual delivery necessary to constitute a bailment, but under the 
common law incorporeal personalty, as debts or choses in action, 
may be bailed. In fact, the development of the law of bailment 
has been a transition from the theory of actual delivery and rede- 
livery of corporeal chattels to the theory of the transfer for a 
special purpose of the possession of any kind of personal prop- 
erty, and to-day it can be said that the one distinguishing element 
of the bailment relation is the rightful temporary holding of the 
possession of personal property, by one not its owner.* Since 
the relation is one of contract, the general rules applicable to all 
contracts apply. A marked feature of the law of bailments is the 
fact that it consists almost wholly of duties arising between the 
parties by implication of law, almost all of which may be changed 
by express contract, and in perhaps no other branch of the law 
of contracts do we find so prominently the implied contract.^ 
Likewise, as most contracts can be entered into by the agent of 
the contractor, the principles of agency apply to bailments, and 
this is especially true in reference to the law of carriers, since 
most of the carriers to-day are great corporations which can 
contract only by and through their agents. 

§ 2987. Origin of the law of bailment. — The modern law 
of bailment is to some degree a mingling of the Roman law and 
the common law, or rather, the grafting of Roman law terms upon 
common-law principles. The modern English law of bailment 
had its origin in the case of Coggs v. Bernard,^ decided by Lord 
Holt in 1703, and all the present law of the subject has been a 
development of principles tentatively laid down by Lord Holt 

' Street on Foundations of Legal other, that creates the bailment. 
Liability vol. 2, 252; Schouler Bail- Burns v. State, 145 Wis. Hi, 128 N. 
ments Including Carriers (1905), W. 987, 140 Am. St. 1081 
§ 1 A contract between the parties Hale Bailments, p. 27. 
is liot necessary to a bailment, but it " Coggs v. Bernard, 2 Ld. Ray- 
is the element of lawful possession, mond 909, 1 Smith Lead. Cas., 7th 
however created, and duty to account Am. ed. 369. 
for the thing as the property of an- 



BAILMENTS. 238 

in that case. Sir William Jones in his Essay on Bailments and 
Justice Story in his work on bailments have had much to do 
with the development and classification of the principles underly- 
ing the subject.^ Lord Holt and Sir William Jones introduced 
the classification of the Roman law as to the relations embraced 
in the subject of bailment, Justice Story introduced another 
classification based upon the doctrine of consideration, and the 
modern classification is a combination of the two, using names 
derived from the Roman classification for many of the classes, 
while not giving to the relations thus designated the full Roman 
signification.' A large portion of the law of bailments has been 
laid down by the text-writers in advance of actual decision from 
the courts, and for many of the principles referred to in this ar- 
ticle, citation is made of the works of Story and Jones as reposi- 
tories of the law. 

§ 2988. Classification of bailments. — The general classes 
of bailments are : i . Gratuitous bailments, for the benefit of one of 
the parties to the bailment ; and 2. Bailments upon consideration, 
for the mutual benefit of both parties. Gratuitous bailments are 
further subdivided: i. Bailments for the benefit of the bailor 
alone, of which there are two kinds : Deposits, where the bailee 
takes a thing to be kept gratuitously for the bailor, and Mandates, 
where the bailee undertakes for the bailor gratuitously to per- 
form work upon a thing, or to carry it from one place to an- 
other; and 2. Bailments for the benefit of the bailee alone, or 
Commodates, where the bailor gratuitously lends a thing to the 
bailee for his temporary use and enjoyment. Of Bailments upon 
consideration for mutual benefit, there are two main divisions : 
I. Pledges (the Roman pignus or vadium), where the possession 
of a thing is delivered as security for the performance of an 
undertaking or obligation, or the payment of a debt; and 2. 
Contracts of hiring, where the bailee does something to the thing 
bailed in return for a reward. Of contracts of hiring there are 

' Jones Essay on Bailments (1781); Legal Liability, vol. 2, ch. 27, pp. 

Story Bailments (1832). ^ 271-4; Hale Bailments, pp. 35-7; 

° For the classification of bail- Goddard Bailments, § 12 ; Schouler 

ments, see Van Zile Bailments (2d Bailments (3rd ed.), §§ 13, 14. 
ed,), ch. 2; Street on Foundations of 



239 DEFINITIONS AND PRINCIPLES. § 2989 

four classes, according to whether the bailor lets to the bailee the 
use of a thing (locatio rei), or hires the bailee to work upon a 
thing (locatio operis faciendi), or hires him to keep a thing 
(locatio custodise), or hires him to carry a thing from place to 
place (locatio operis mercium vehendarum), in these latter three 
the bailor hiring services about a chattel. And of contracts of 
carriage there may be contracts for the carriage of goods, or of 
passengers, or of live stock. Among the locatio or hiring con- 
tracts three species stand out as exceptional bailments, because of 
certain exceptional liabilities and duties imposed by law because 
of their peculiar situation, and these are postinasters, innkeepers 
and common carriers. In magnitude and importance the subject 
of carriers at the present day overshadows all the other subjects 
in the classification of bailments. 

§2989. The consideration which supports the contract. — 

Under the common law every contract not under seal must be sup- 
ported by a consideration, while under the civil law, from which 
we in part derive our law of bailments, such was not in all instances 
necessary." In the cases of bailments for mutual benefit, it is at 
once apparent that the contract is supported by a consideration 
moving from each side. Where the bailment is a commodate, the 
benefit accruing to the bailee is sufficient consideration to hold 
him to the legal obligation of his contract, but it is not so easy 
to see what consideration binds the gratuitous bailee for the 
benefit of the bailor in a deposit or mandate. However, it is 
settled that the delivery of the property into the bailee's care, 
which is a detriment to the bailor in that it deprives him of the 
possession of his property and some rights connected therewith, 
is a sufficient consideration for the bailee's contract, if he accepts 
the goods. It is said that the confidence reposed in the bailee by 
the bailor is a sufficient consideration, or in the words of Lord 
Holt in Coggs v. Bernard, "the owner trusting him [the bailee] 

I "In a real contract under the civil was in early English days that of 

law a duty attached under the law, debt, rather than assumpsit. See 

without aid from a, promise which Street on Foundations of Legal Lia- 

must be supported by a consideration, bility, vol. 2, p. 270, vol. 2, ch. XXVI ; 

The action in cases of bailment Coggs v. Bernard, 2 Ld. Raym. 909. 



§ 2990 BAILMENTS. 24O 

with the goods is a sufficient consideration to oblige him to a 
careful management."" 

§ 2990. Principles common to all bailments and subject- 
matter of a bailment. — There are certain well-established 
principles of law which are applicable to all of the various classes 
of bailments, as well as certain essential elements common to all 
bailments, and it will be the aim of the sections next succeeding 
to briefly discuss these principles and elements. The subject- 
matter of a bailment is always personal property. It may be 
corporeal or incorporeal.^^ Real estate cannot be the subject of a 
bailment. ^^ When one by contract transfers the possession of 
realty to another, while retaining ownership, the relation created, 
though to a certain extent similar to that of bailor and bailee, is 
that of landlord and tenant. In fact, the distinction between the 
relations is one rather artificial than actual, but from its incep- 
tion the law of bailments has been confined to personal property. 

§ 2991. The parties to a bailment. — The parties to a bail- 
ment are called the bailor and the bailee. The bailor is the 
party from whose possession the property is transferred for the 
accomplishment of the special purpose of the bailment, and the 
bailee is the party into whose possession such transfer for such 
purpose is made. It is not necessary that the bailor should be 
the owner, but simply that he have possession of the property, 
nor is it necessary that his possession should be lawful.^'' If a 
bailment is made by one entitled only to the possession of the 
property, it is, of course, liable to be defeated in its purpose by 
the exercise of the paramount rights of the owner. Where a 
bailment is made by an express contract, the capacity of the par- 

"Coggs V. Bernard, 2 Ld. Raym. 10 Johns. (N. Y.) 471; Appleton v. 
909; Clark v. Gaylord, 24 Conn. 484; Donaldson, 3 Pa. St. 381. Any kind 
McCauley v. Davidson, 10 Minn. 418, of personal property, including cur- 
GilfiUan 33S ; Kincheloe v. Priest, 89 rent money, and even a chose in ac- 
Mo. 240, 58 Am. Rep. 117. See tion, if in existence, may be the sub- 
Young V. Noble, 2 Disney (Ohio) ject of a bailment. Van Wagoner v. 
485; McDaniels v. Robinson, 26 Vt. Buckley, 133 N. Y. S. 599. 
316, 62 Am. Dec, 574n. '= Williams v. Jones, 3 H. & C. 

"Loomis V. Stave, 72 111. 623; 256; Coupledike v. Coupledike, Cro. 

Jarvis v. Rogers, 15 Mass. 389; Jac. 39. See Dewey v. Bowman, 8 

White V. Phelps, 14 Minn. 27, 100 Cal. 145. 

Am. Dec. 190; McLean v. Walker, " Van Zile Bailments (2d ed.), § 11. 



241 DEFINITIONS AND PRINCIPLES. § 2992 

ties to contract is governed by their competency to enter into an 
ordinary contract, and infants, lunatics or married women, ex- 
cept where their disabilities have been removed by statute, can 
no more enter into a bailment contract than any other contract." 
However, as has often been said, this disabiHty is to be used as a 
shield, and not as a sword, and while persons under a disability 
are not liable for a breach of their contract, yet, having once 
come into the possession of goods, they are liable in tort for their 
conversion, and a departure from the purposes of the bailment is 
usually held a conversion.^" An infant may make a contract as 
bailor, which will be binding on the bailee until the infant re- 
pudiates it, or recalls the property bailed." Under the common 
law the contract of a married woman with respect to a bailment 
is absolutely void.^^ But where one under a disability becomes 
in such a situation that the law would imply the bailment relation 
to exist, as if such a one finds lost property, then he is held to 
the care of a bailee in regard to the property.^^ A corporation 
acting within its corporate authority may be a bailor or bailee.^^ 

§ 2992. Delivery and accepteince of the property. — It is es- 
sential to the existence and the inception of the bailment relation 
that there should be a delivery of the thing bailed, or something 
which takes the place of delivery. Delivery may be actual, con- 
structive or by operation of law. Delivery is actual where the 
bailor makes a manual transfer of the property to the bailee, as 
where shoes are left with a cobbler for repairs, or a package de- 

"Fetrow v. Wiseman, 40 Ind. 148; Wiley, 23 Vt. 355, 56 Am. Dec. 85; 

Fay V. Burditt, 81 Ind. 433, 42 Am. Ray v. Tubbs, 50 Vt. 688, 28 Am. 

Rep. 142: Illinois Land &c. Co. v. Rep. 519. See Clark Contracts (1894), 

Bonner, 75 111. 315; Hagebush v. p. 261. 

Ragland, 78 111. 40 ; Scanlan v. Cobb, " Story Bailments, § 50 ; Schouler 

85 111. 296; Holmes v. Rice, 45 Mich. Bailments (3d ed.), § 27. 

142, 7 N. W. 772; Shoulters v, Al- "Clark Contracts (1894), p. 276. 

len, 51 Mich. 529, 16 N. W. 888; "Van Zile Bailments (2d ed.), § 12. 

Owen V. Long, 112 Mass. 403; Eaton "Lehman Bros. v. Tallassee Mfg. 

V. Eaton, 37 N. J. L. 108, 18 Am. Co., 64 Ala. 567: Combination Trust 

Rep 716; Mutual Life Ins. Co. v. Co. v. Weed, 2 Fed. 24; Baldwin v. 

Hunt 79 N. Y. 541 ; Harner v. Dip- Canfield, 26 Minn. 43, 1 N. W. 261 ; 

pie, 31 Ohio St. 72, 27 Am. Rep. 496. Chouteau v. Allen, 70 Mo. 290 ; Dun- 

" Mills V. Graham, 1 Bos. & P. comb v. New York, H. & N. R. Co., 

140; Homer v. Thwing, 3 Pick. 84 N. Y. 190; Lloyd v. West Branch 

(Mass) 492; Freeman v. Boland, 14 Bank, IS Pa. St. 172, 53 Am. Dec. 

R. I. 39, 51 Am. Rep. 340; Towne v. 581. 

16 — Contracts, Vol. 4 



§ 2992 BAILMENTS. 242 

livered to an expressman, or an umbrella loaned to a friend. 
Constructive delivery arises when, on account of circumstances 
or the nature of the property, manual delivery is impossible or 
useless, but from the circumstances there may be implied an in- 
tention of the person in possession to act as bailee for another.^" 
So, vi^here a vendor holds goods after a sale, he is by constructive 
delivery the bailee of such goods for the vendee,^^ or vi^here after 
a contract of hiring is terminated the hirer retains the property 
for the benefit of the bailor, a new bailment is created without 
actual change of possession. ^^ Delivery by operation of law takes 
place when lost goods are found, or goods seized under legal 
process, the finder or the officer being a bailee by operation of 
the law, and not because the owner has consented to their deliv- 
ery to him.^^ A delivery may be made to the servant or agent of 
the bailee."* Delivery is not complete without acceptance by 
the bailee, and even though one may involuntarily become a 
bailor, he can not be charged as a bailee unless he voluntarily 
takes possession of the goods, even in case of the finder of lost 
property.^^ But it is said that where one knowingly holds pos- 
session of another's goods, he is liable as a bailee, and if he finds 
the goods of another in his possession and does not know how he 
obtained possession, he is held as a bailee after he obtains no- 
tice.^° Although one may not be made a bailee against his will,'^ 



'Story Bailments (9th ed.), § 55 



Blake V. Kimball, 106 Mass. 115; Tux- "' Boynton v. Payrow, 67 Maine 



worth V. Moore, 9 Pick. (Mass.) 346 
Whitaker v. Sumner, 20 Pick, 
(Mass.) 399; Dillenback v. Jerome, 
7 Cow. (N. Y.) 294. See King v, 
Jarman, 35 Ark. 190, 37 Am. Rep 



' Goddard Bailments, § 4. 



587; Brown v, Warren, 43 N. H. 430; 
City Bank v. Perkins, 29 N, Y. 554, 
86 Am. Dec. 332; Lloyd v. Barden, 3 
Strob. (S. Car.) 343; McCready v. 
Haslock, 3 Tenn. Ch. 13. See Baker 



11, and note; Sherman v. Hicks, 14 & Lockwood Mfg. Co. v. Clayton, 40 

N. Mex. 439, 94 Pac. 959. Tex. Civ. App. 586, 90 S. W. 519. 

^ Oakley V. State, 40 Ala. 372. So "^^ Goddard Bailments, § 5. One 
where the purchaser of goods shipped who finds a thing is not compelled 
them back to the seller without any to take possession of it, but if he does 
notification, or any previous agree- so voluntarily he is held by the law 
ment, and the seller stored the goods to the care of a depositary. See Van- 
to protect them, the seller became a drink v. Archer, 1 Leon. 221 ; Dough- 
gratuitous bailee for the buyer, and erty v. Posegate, 3 Iowa 88, Cory v. 
the buyer was liable to him for nee- Little, 6 N. H. 213, 25 Am. Dec. '458. 
essary storage charges actually paid. '"Hale Bailments, § 2; Wolf v. 
Smith V. F. W. Heitman Co., 44 Shannon, 50 111. App. 396- Tones v 
Tex. Civ. App. 358, 98 S. W. 1074. Maxwell, 1 Lack, Leg. N. (Pa.) 191. 

^Macomber v. Parker, 14 Pick. "Cory v. Little, 6 N. H 213 25 
(Mass.) 497. 



243 DEFINITIONS AND PRINCIPLES. § 2993 

yet as an agreement between the parties is not necessary to create 
a bailment, and it may arise by operation of law, a taking posses- 
sion of personal property without a present intent to appropriate 
it may bring into being all the contractual elements essential to 
a bailment ; as where a lunatic throws away a roll of money while 
being pursued and one of the pursuers picks it up and gives it to 
a constable who takes the lunatic in custody, the constable is a 
bailee of the money. ^* 

§ 2993. Possession of the property. — As we have seen, the 
characteristic of the bailment relation is that the possession of 
the property bailed, without title thereto, is in the bailee, and it is 
essential to the existence of the relation that the bailee have pos- 
session. During the accomplishment of the special purpose of 
the bailment the bailee has the right of possession against the 
bailor, so long as the bailee himself is not in default in the con- 
ditions of the contract.^^ But the bailee has no title, by an un- 
authorized sale cannot convey title to an innocent purchaser, can 
in no event convey more than his own interest, and cannot subject 
the property bailed to a lien.^" 

§ 2994. The bailor's title and rights. — While the bailee has 
the right of possession, he can never hold the general title while 
the relation of bailment continues, for a man cannot be a bailee 
for himself. The right of property remains in the bailor, if he be 
the owner; if not, it remains in the true owner.^^ The owner may 

Am. Dec. 458; Lloyd v. West Branch 33 Pa. Super. Ct. 218; Barnett v. 
Bank, IS Pa.' St. 172, 53 Am. Dec. Fein, 41 Pa. Super. Ct. 423; Wood- 
SSI, ward V. San Antonio Tr. Co. (Tex. 

''Burns v. State, 145 Wis. 373, 128 Civ. App.), 9S S. W. 76; Cases cited 

N. W. 987, 140 Am. St. 1081. in note, 2S L. R. A. (N. S.) 776. 

^ Simpson v. Wrenn, SO 111. 222 ; Where the conditional vendee of 

Burdict v. Murray, 3 Vt. 302, 21 Am. property bails it for its improvement 

Dec. 588. by work and labor thereon, no lia- 

'^ Boozer v. Jones, 169 Ala. 481, 53 bility is created against the vendor or 

So. 1018; Clay v. Sullivan, 156 Ala. the property. Baughnan Automobile 

892, 47 So. 153 ; Robinson v. Haas, 40 Co. v. Emanuel, 137 Ga. 3S4, 1Z S. E. 

Cal. 474; Newton v. Cardwell &c. Co., 511. 

41 Colo. 492, 92 Pac. 914; Leffler v. ''See Story Bailments (9th ed.), 

Watson, 13 Ind. App. 176, 40 N. E. § 93; Henry v. Patterson, 57 Pa. St. 

1107, 41 N E. 467; Small v. Robin- 346; Pritchett v. Cook, 62 Pa. St. 

son, 69 Maine 425, 31 Am. Rep. 299; 193; Northcutt v. State, 60 Tex. Cr. 

Sowden V. Kessler, 76 Mo. App. 581; App. 259, 131 S. W. 1128; The Laflin 

Heisley v. Economy Tool Mfg. Co., & Rand Powder Co. v. Burkhardt, 97 

U. S. 110, 24 L. ed. 973. 



§ 2995 BAILMENTS. 244 

transfer the title and the right of property while the bailment is in 
the bailee's possession, subject to the bailee's rights, and without 
the bailee's consent ; and if the bailee knows of such transfer of 
title he must hold the property as against attaching creditors of 
the bailor, or a claimant as bona fide purchaser.^'' And where the 
bailor's right of property carries with it the right of possession, 
he may maintain replevin against one who is wrongfully in pos- 
session of the property bailed/^ 

§ 2995. The bailee's estoppel to deny the bailor's title. — 
"A bailee shall never be permitted to controvert the bailor's title, 
or set up against him a title acquired by himself during the bail- 
ment, which is hostile to, or inconsistent in character with, that 
which he acknowledged in accepting the bailment.'"** And if 
the bailee owns the paramount title but receives possession from 
the bailor under a bailment contract he is estopped to deny the 
bailor's title until there has been a redelivery.^^ But this estop- 
pel is only as to title at the time of bailment and the bailee may 
show that since the bailment the title has been assigned to an- 

"' Riddle V. Blair, 148 Ala, 461, 42 ''Jensen v. Eagle Ore Co., 47 Colo. 

"So. 566; Hodges v. Hurd, 47 111. 363; 306, 107 Pac. 259, 33 L. R. A. (N. S.) 

Erwin v. Arthur, 61 Mo. 386; Gerber 681 and note. See also, Riddle v. 

V. Monie, 56 Barb. (N. Y.) 652. Blair, 148 Ala. 461, 42 So. 560; Palni- 

'^ Walker v. Wilkinson, 35 Ala. 725, tag v. Doutrick, 59 Cal. 154, 43 Am. 

76 Am. Dec. 315 ; Cannon v. Kinney, Rep. 245 ; Barker v. S. A. Lewis &c. 

3 Scam. (111.) 9; Root v. Shandler, Co., 79 Conn. 342, 65 Atl. 143, 118 

10 Wend. (N. Y.) 110, 25 Am. Dec. Am. St. 141; Simpson v. Wrenn, 

546; Estey Co. v. Dick, 41 Pa. Super. SO 111. 222, 99 Am. Dec. 511; Pulli- 

Ct. 610; Burdict v. Murray, 3 Vt. am v. Burlingame, 81 Mo. Ill, 51 

302, 21 Am. Dec. 588; Strong v. Am. Rep. 229; Hendricks v. Mount, 

Adams, 30 Vt. 221, 73 Am. Dec. 305. 5 N. J. L. 738, 8 Am. Dec. 623; 

If the bailor has the right to posses- First Nat. Bank v. Mason, 95 Pa. 

sion at any time, he may maintain St. 113, 40 Am. Rep. 632; In re 

trespass against a third person for in- "The Idaho," 93 U. S. 575, 23 L. ed. 

jury to the property. Bradley v. 978; Nudd v. Montanye, 38 Wis. 511, 

Davis, 14 Maine 44, 30 Am. Dec. 729 ; 20 Am. Rep. 25. 

Staples V. Smith, 48 Maine 470 ; Wal- "' Pepper v. James, 7 Ga. App. 518, 

cot V. Pomeroy, 2 Pick. (Mass.) 121. 67 S. E. 218; Simpson v. Wrenn, 50 

But if the bailment is for a definite 111. 222; Thompson v. Williams, 30 

time, the bailor cannot maintain trcs- Kans. 114, 1 Pac. 47; Bursley v. 

pass, since he has no right to pes- Hamilton, IS Pick. (Mass.) 40, 25 

session until the expiration of the Am. Dec. 433n; Osgood v. Nichols, 5 

time. Hume v. Tufts, 6 Blackf. Gray (Mass.) 420; Bricker v. Stroud 

(Ind.) 136; Lunt v. Brown, 13 Maine Bros., 56 Mo. App. 183; Hampton v. 

236; Walcot v. Pomeroy, 2 Pick. Swisher. 4 N. J. L. 73. See H. C. 

(Mass.) 121; Wilson v. Martin, 40 Porter Co. v. Boyd, 171 Fed. 305, 96 

N. H. 88. C. C. A. 197. 



245 



DEFINITIONS AND PRINCIPLES. 



§ 2996 



Other.'" The purchaser from the bailor may assert the principle 
that the bailee cannot deny his bailor's title." If the bailor is not 
the true owner and the true owner demands the property from the 
bailee, he is liable for failure to dehver to such owner, and de- 
livery to the true owner is an excuse for failure to redeliver to the 
bailor.*^ If the property was taken from the bailor by regular 
process of law, he is excused from redelivery.^" And it is held 
that a purchaser from the bailee is not estopped to assert such title 
against the bailor.*" 

1 §2996. Bailee's rights against third parties. — Since the 
bailee is entitled to the possession of the property bailed, he has 
a right to protect that possession against third parties. So he 
may bring replevin for its possession, or trover for its value 
where it is so destroyed or injured that the benefits of possession 
are lessened.*^ Likewise he has a special interest to the extent 
of his rights under the bailment contract and may sue wrongdoers 



"Kingsman v. Kingsman, 6 Q. B. 
Div. 122; Cole v. Wabash, St. L. & 
P. R. Co., 21 Mo. App. 443; Gruel 
V. Yetter, 27 Misc. (N. Y.) 494, 58 
N. Y. S. 373; Burnett v. Fulton, 48 
N. Car. 486. The bailee when sued 
for conversion is not estopped from 
showing that the title held by the 
bailor at the time of bailment has 
since that time been acquired by him- 
self or passed to another. Shellhouse 
V. Field (Ind. App.), 97 N. E. 940. 

=' Riddle V. Blair, 148 Ala. 461, 42 
So. 560. 

"^ Davis V. Donahoe- Kelly Banking 
Co., 152 Cal. 282, 92 Pac. 639; Fisher 
V. Bartlett, 8 Greenl. (Maine) 122, 22 
Am. Dec. 225 ; Mullins v. Chickering, 
110 N. Y. 513, 18 N. E. Ill, 1 L. R. 
A. 463; King v. Richards, 6 Whart. 
(Pa.) 418, Zl Am. Dec. 420; Rosen- 
field V. Express Co., 1 Woods (U. 
S.) 131, 20 Fed. Cas. No. 12060; In 
re "The Idaho," 93 U. S. 575, 23 L. 
ed. 978. Or if the true owner makes 
a demand, the bailee may attorn to 
him by agreeing to hold the property 
for him, and may set up his demand, 
paramount title and attornment as an 
excuse for not redelivering to the 
bailor. Biddle v. Bond, 6 B. & S. 225, 
118 E. C. L. 225; Dixon v. Yates, S B. 



6 Ad. 313, 27 E. C. L. 137; Hayden 
v. Davis, 9 Cal. 573 ; Pepper v. James, 

7 Ga. App. 518, 67 S. E. 218; Atlantic 
&c. R. Co. v. Spires, 1 Ga. App. 22, 
57 S. E. 973; Hastings v. Allen, 14 
Ohio 58, 45 Am. Dec. 522. 

='Ohio &c. Co. V. Yohe, 51 Ind. 
181, 19 Am. Rep. 727; Fite v. Bried- 
enback, 32 Ky. L. 400, 105 S. W. 
1182; French v. Star Union Transp. 
Co., 134 Mass. 288; Schrauth v. Dry 
Dock Sav. Bank, 86 N. Y. 390; 
Bliven v. Hudson R. Co., 36 N. Y. 
403; Stiles v. Davis, 1 Black (U. S.) 
101, 17 L. ed. 33. 

"McFerrin v. Perry, 1 Sneed 
(Tenn.) 314. 

"Armory v. Delamirie, 1 Strange 
505, 1 Smith Lead. Cas. 679; Atkins 
v. Moore, 82 111. 240; Little v. Fos- 
sett, 34 Maine 545, 56 Am. Dec. 671 ; 
Harrington v. King, 121 Mass. 269; 
Chamberlain v. West, Zl Minn. 54, 
33 N. W. 114; Baggett v. McCormack, 
Ti Miss. 552, 19 So. 89, 55 Am. St. 
554; Vermillion v. Parsons, 101 Mo. 
App. 602, 12, S. W. 994. When the 
bailor recovers a judgment against 
the bailee for the value of the goods, 
and also has possession of them, the 
bailee, upon satisfaction of the judg- 
ment, acquires the property in the 



§ 2997 BAILMENTS. 246 

who have lost the property or injured it/- or if he has an interest 
under an express contract may recover for the negligent destruc- 
tion of the property by third parties.*'' As a rule, he may recover 
the entire damages, and is held as a trustee for the bailor as to the 
excess above his interest.*" 

§ 2997. Bailee's right to use property — Conversion. — The 

bailee has no right to use the bailed property unless it is given him 
by contract, or unless the owner's assent would be presumed ; 
and he is not only liable for a breach of the contract for a misuse 
of the article bailed, but "The general rule is that if a bailee 
having authority to use a chattel in a particular way uses it in 
a different way or to a greater extent than authorized, such unau- 
thorized use is a conversion of the chattel for which the bailor 
may maintain a trover for its value."*^ It is, as a rule, a ques- 
tion of circumstances as to whether the use was authorized, in the 
absence of any contract on the subject of the use, and the fol- 
lowing tests may be used as applicable. One is to consider 
whether from the circumstances the owner's assent would be pre- 
sumed, and this is generally done where the use is beneficial to 
the property, but not so when it is not. It is the duty of the 
bailee to use the property so far as necessary for its preservation, 
as to milk a cow, and to give a horse reasonable exercise. Also, 
if the property is of such a character that it requires expense to 
keep it, it is said the bailee may use it reasonably to compensate 

goods, and may bring replevin against Nebr. 549, 107 N. W. 793, 14 Ann. 
the bailor and recover tliem. Bauer Cas. 634, and note, citing many cases 
V. Hess, 76 N. J. L. 257, 69 Atl. 966. in which a bailee has recovered for 
I "Hare v. Fuller, 7 Ala. 717; Knight injuries to or the loss of such prop- 
V. Davis Carriage Co., 71 Fed. 662, 18 erty caused by the acts of persons 
C. C. A. 287; Atlantic Coast Line R. other than the owner. 
Co. V. Partridge, 58 Fla. 153, SO So. "Walsh v. United States Tent &c. 
634; Peoria P. & J. R. Co. v. Mc- Co., 153 111. App. 229; McCrossan v. 
Intire, 39 111. 298; Little v. Fossett, Reilly, 33 Pa. Super. Ct. 628. 
34 Maine 545, 56 Am. Dec. 671; -"^ Cartlidge v. Sloan, 124 Ala. 596, 
Wilkes v. Southern R. Co., 21 Ann. 26 So. 918. See also, Bryant v. War- 
Cas. 79, 85 S. Car. 346; 67 S. E. 292; dell, 2 Exch. 479; Columbus v. How- 
Godfrey v. Pullman Co., 87 S. Car. ard, 6 Ga. 213. See note to McCurdy 
361, 69 S. E. 666, Ann. Cas. 1912B v. Wallblom Furniture & Carpet Co., 
971. See Central R. of New Jer- 94 Minn. 326, 102 N. W. 873. To the 
sey V. Buyway Refining Co., 81 N. same effect, Haines v. Chappell, 1 Ga. 
J. L. 456, 79 Atl. 292, Ann. Cas. 1912 App. 480, 58 S. E. 220 ; Raynor v. 
D n and note. Sheffler, 79 N. J. L. 340, 75 Atl. 748. 
*° Union Pacific R. Co. v. Meyer, 76 The bailee is liable in tort for con- 



247 DEFINITIONS AND PRINCIPLES. § 2998 

him for the charge of keeping.*" But none of these tests fur- 
nishes an absolute rule. It has been held that the bailee of a slave 
may make a reasonable use of his services/' and the same rule 
has been applied to the bailee of a horse/* An unauthorized 
sale by the bailee is a conversion, and is void as to the owner." 
So a wrongful delivery or a failure to redeliver may be a con- 
version.'^" The destruction of property under hire by the bailee 



§ 2998. Expenditures upon property bailed. — In the ab- 
sence of a special contract, the ordinary expenses incurred in the 
care of a chattel bailed must be borne by the bailee, but extraord- 
inary expenses, such as those which become necessary in an emer- 
gency to protect the property, as for instance a veterinary sur- 
geon's services for a sick horse, must be paid for by the bailor, 
the bailee being held the agent of the bailor to do whatever is 
necessary to preserve the goods and for this purpose to bind him 
by a contract with third persons. ^^ In fact, the bailor is liable 
for all reasonably necessary expenses which are not connected 
with the benefit to the bailee to be obtained from the accomplish- 
ment of the bailment purpose, but which are connected with the 
necessai-y care of the property for the owner.^^ The bailee is 
liable for expenses caused by his own default."^^ 

i § 2999. The bailor must not expose the bailee to danger. — 

If the bailor knows, or in the exercise of reasonable diligence 

version. Palmer v. Mayo, 80 Conn. "Taylor v. Welsh, 138 111. App. 

3S3, 68 Atl. 369, 15 L. R. A. (N. S.) 190; Schwartz v. Clark, 136 111. App. 

428; Farkas v. Powell, 86 Ga. 800, 13 150. 

S E 200 12 L R. A. 397 ; Hains v. "' Murry v. Postal Tel. &c. Co., 210 

Chappell, 1 Ga. App. 480, 58 S. E. Mass. 188; 96 N. E. 316; Alton v. 

220 ■ Hall V. Corcoran, 107 Mass. 251, New York Taxicab Co., 66 Misc. (N. 

9 Am. Rep. 30; Hanson v. Skogman, Y.) 191, 121 N. Y. S. 271. See cases 

14 N. Dak. 445, 105 N. W. 90; Car- cited in § 3005. 

nev V Rease 60 W. Va. 676, 55 S. E. °" Kiskadden v. United States, 44 

729 ■ ' Ct. CI. (U. S.) 205. 

*" Alvord V Davenport, 43 Vt. 30. "Leach v. French, 69 Maine 389, 31 

"Farrow v Bragg's Admr., 30 Am. Rep. 296; Harter v. Blanchard, 

Ala. 261; Rand v. Oxford, 34 Ala. 64 Barb. (N. Y ) 617. 

474 "^ Fagan v. Thompson, 38 Fed. 467 ; 

"Coggs v Bernard, 2 Ld. Raym. Furness v. Union Nat. Bank, 147 111. 

909; Kennet v. Robinson, 2 J. J. 570 35 N. E. 624 

Marsh. (Ky.) 84. "'aCuUen v. Lord, 39 Iowa 302. 



§ 3000 BAILMENTS. 243 

could know, of anything about the thing bailed which would be 
liable to cause injury to the bailee, he is liable for injury caused 
by his failure to inform him, unless the defects are open and 
patent to the bailee. Thus the bailor of an animal for hire is 
bound to disclose vicious propensities which are directly danger- 
ous, if he knows of them.^* Since in cases of gratuitous bail- 
ments the benefit is exclusively to the bailee, the liability of the 
bailor for defects in the thing loaned is only for those which he 
knows but does not communicate to the bailee, and he is not liable 
for injuries caused by defects of which he does not know.^^ 

§ 3000. Care to be taken of the property bailed. — The 
care which should be given by the bailee to the property bailed is 
almost entirely dependent upon the circumstances of the bail- 
ment.^° But the general rule is that the diligence required by 
the bailee is dependent upon the benefit derived from the bailment. 
Thus, where the bailment is gratuitous, for the benefit of the 
bailor, the bailee is held to only a shght degree of diligence ;°' 
where the bailment is one for mutual benefit, he must use ordi- 
nary diligence, that is, such diligence as an ordinarily prudent 
man under similar circumstances uses in the conduct of his own 
affairs of similar nature;**^ where the bailment is gratuitous, 

"Emmons v. Stevane, 11 N. J. L. Co., 105 N. Car. 140, 11 S. E. 316; 

570, li Atl. 544 (one hiring board Grand Trunk R. Co. v. Ives, 144 U. 

for a dog) ; Kissam v. Jones, 56 Hun S. 408, 36 K ed. 485, 12 Sup. Ct. 679. 

(N. Y.) 432, 31 N. Y. St. 198, 10 N. ""Davis v. Gay, 141 Mass. 53, 6 N. 

Y. S. 94; Conn v. Hunsberger, 224 E. 549; Gerish v. Savings Bank, 138 

Pa. St. 154, IZ Atl. 324, 25 L. R. A. Mich. 46, 100 N. W. 1000; Hibernia 

(N. S.) 372, 132 Am. St. 770 (a liv- Bldg. Assn. v. McGrath, 154 Pa. St. 

ery stable keeper who lets a horse 296, 26 Atl. 377, 35 Am. St. 828; 

for hire). Whitney v. First Nat. Bank, 55 Vt. 

"'■ Robideaux v. Hebert, 118 La. 154, 45 Am. Rep. 598. Compare Levi 

1089, 43 So. 887, 12 L. R. A. (N. S.) v. Missouri &c. R. Co., 157 Mo. App. 

632 ; Gagnon v. Dana, 69 N. H. 264, 536, 138 S. W. 699. 

39 Atl. 982, 41 L. R. A. 389, 76 Am. "^ Fairmount Coal Co. v. Jones & 

St. 170. Adams Co., 134 Fed. 711, 67 C. C. A. 

"■ Hale Bailments, p. 23 ; 2 Jaggard 265 ; Morris &c. Co. v. Wilkes, 1 Ga. 

Torts 900; Netzow Mfg. Co. v. South- App. 751, 58 S. E. 232; Walpert v. 

ernR. Co., 7Ga, App. 163,66S. E.399; Bohan, 126 Ga. 532, 55 S. E. 181, 6 

Pennsylvania R. Co. v. O'Shaugh- L. R. A. (N. S.) 828n, 115 Am. St. 

nessy, 122 Ind. 588, 23 N. E. 675; 114; Hunter v. Ricke, 127 Iowa 108, 

Meredith v. Reed, 26 Ind. 334; Lane 102 N. W. 826; Woodruff v. Painter, 

V. Boston & A. R. Co., 112 Mass. 455; 150 Pa. St. 91, 24 Atl. 621, 30 Am. 

Barnum v. Terpenning, 75 Mich. 557, St. 786; Gleason v. Beers' Estate, 59 

42 N. W. 967 : Hall v. Chicago B. Vt. 581, 10 Atl. 86, 59 Am. Rep. 757. 

& N. R. Co., 46 Minn. 439, 49 N. W. For definition of ordinary diligence see 

239; McAdoo v. Richmond & D. R. Cloyd v. Steiger, 139 111. 41, 28 N. E. 



249 



DEFINITIONS AND PRINCIPLES. 



§ 3000 



for the benefit of the bailee, he must use great diligence/' It will 
be seen from the definitions given of ordinary diligence that this 
is dependent upon the circumstances of the case and may vary 
greatly under different conditions.''" Slight diligence may perhaps . 
be said to be the diligence shown in their own affairs by men 
who are not ordinarily prudent, but who take some care of their 
affairs,"^ and great diligence to be that diligence shown by men > 
of ordinary prudence in affairs of their own to which they give 
especial care."^ It would probably be better to abandon the terms 
"slight," "ordinary" and "great diligence" entirely, and to state as 
the rule applicable that the bailee is held to reasonable care under 



987; Ray's Adrars. v. Bank of Ken- 
tucky, 10 Bush (Ky.) 344; Wood v. 
Remick, 143 Mass. 102, 9 N. E. 831 ; 
Maynard v. Buck, 100 Mass. 40; 
Ruggles V. Fay, 31 Mich. 141 ; Swent- 
zel V. Bank, 147 Pa. St. 140, 23 Atl. 
405, IS L. R. A. 305n, 30 Am. St. 718; 
First Nat. Bank of Carlisle v. Gra- 
ham, 79 Pa. St. 106, 21 Am. Rep. 49. 
For full discussion of liability of 
bailee for hire, see Firemen's Fund 
Ins. Co. V. Schreiber (Wis.), 135 N. 
W. 507. 

"Hagebush v. Ragland, 78 111. 40; 
Wood V. McClure, 7 Ind. 155; Green 
V. HoUingsworth, 5 Dana (Ky.) 173, 
30 Am. Dec. 680. 

"Judge Story says (Story on Bail- 
ments [9th ed.], § IS) : "What con- 
stitutes ordinary diligence may also 
be materially affected by the nature, 
the bulk, and the value of the articles. 
A man would not be expected to take 
the same care of a bag of oats as of 
a bag of gold ; of a bale of cotton as 
of a box of diamonds or other jew- 
elry; of a load of common wood as 
of a box of rare paintings ; of a rude 
block of marble as of an exquisite 
sculptured statue. The value,_ espe- 
cially, is an important ingredient to 
be taken into consideration upon 
every question of negligence; for 
that may be gross negligence in the 
case of a parcel of extraordinary 
value, which in the case of a common 
parcel would not be so. The degree 
of care which a man may reasonably 
be required to take of anything must, 
if we are at liberty to consult the dic- 



tates of common sense, essentially 
depend upon the quality and value of 
the thing, and the temptation thereby 
afforded to theft. The bailee, there- 
fore, ought to proportion his care to 
the injury or loss which is likely to 
be sustained by any improvidence on 
his part." Mr. Hale says, "The in- 
fluence of custom and business must 
also be considered in determining 
what is ordinary diligence, as, in cer- 
tain trades, dispositions may be made 
of goods by a man of ordinary pru- 
dence which under other circum- 
stances would certainly be open to the 
charge of great negligence." Hale 
Bailments, p. 26. Mr. Van Zile says, 
"To the circumstances and conditions 
important in determining diligence or 
negligence in caring for the subject 
of the bailment, noted by Judge 
Story, might be added, the season of 
the year, the climate of the country, 
the time and place of doing the busi- 
ness; all these would be important 
elements to be considered." Van 
Zile Bailments (2d ed.), § 42. See 
Erie Bank v. Smith, 3 Brewst. 
(Pa.) 9. 

'"Story Bailments (9th ed.), § 16; 
Jones Bailments, 8; Goddard Bail- 
ments, § 16; Vaughan v. Menlove, 3 
Bing. N. Cas. 468; Tompkins v. Salt- 
marsh, 14 Serg. & R. (Pa.) 275. 

'^Hale Bailments, p. 27; Scranton 
v, Baxter, 4 Sandf. (N. Y.) S; Hage- 
bush V. Ragland, 78 111. 40; Wood v. 
McClure, 7 Ind. ISS; Cullen v. Lord, 
39 Iowa 302. 



§ 3001 BAILMENTS. 25O 

the circumstances of the case, for it is reasonable that the bailee 
who undertakes a gratuitous deposit or mandate should not be 
held to as high a degree of care as the one who undertakes for a 
compensation to perform the same kind of services, and cer- 
tainly it is reasonable that one to whom an article is loaned for 
his own use gratuitously should be held to a higher degree of 
care than if he were hiring the use of the article, since in the 
latter case the bailor could not expect any higher care than he 
himself would ordinarily give to the article bailed, for it is in his 
service, as well as the bailee's. But where a loan is made of an 
article for the benefit of the bailee, the relation is almost that of 
a debt, and the bailee should be held to a degree of care so high 
that little, if anything, short of unavoidable accident or a cause en- 
tirely beyond his control, should excuse him for loss or injury to 
the property which occurs while it is in his possession. Innkeepers 
and common carriers are held to an extraordinary degree of care 
as to property bailed to them, which will be discussed later. The 
bailee is liable for loss or injury to the property caused by his 
failure to use the care demanded by the circumstances, but, ordi- 
narily, in the absence of his negligence in this respect, the bailor 
must bear any loss occurring to the subject of the bailment while 
the bailment relation exists.'^^ 

§ 3001. Bailee must act in good faith. — In addition to ex- 
ercising the due amount of care commensurate with the circum- 
stances of the bailment, the law requires the bailee to act with hon- 
esty and good faith in carrying out the purpose of the bailment. 
He cannot sell or pledge the property or create a lien thereon as if 
he were the owner, and, as we have seen, may not assert title 
in himself against his bailor, nor use the property in an unau- 
thorized manner, nor in any way is he allowed to deal with the 
goods so as to injure the owner.^* 

•^Abraham v. Nunn, 42 Ala. 51; Rep. 280; Baker &c. Co. v. Clayton 

Watkins V. Roberts, 28 Ind. 167; (Tex. Civ. App.), 103 S. W. 197; 

Wood V. McClure, 7 Ind. 155; Mc- Carpenter v. Branch, 13 Vt. 161, Zl 

Ginn V. Butler, 31 Iowa 160; Levy v. Am. Dec. 587. 

Bergeron, 20 La. Ann. 290; Cheno- " Schouler Bailments (3d ed.), 

with V. Dickinson, 8 B. Mon, (Ky.) § 17; Hale Bailments, p. 28; Van 

156; Cass v. Boston &c. R. Co., 14 Zile Bailments (2d ed.), §52; Mor- 

Allen (Mass.) 448; Beller v. Schultz, ris Storage & Transfer Cn. v. Wilkes, 

44 Mich. 529, 7 N. W. 225, 38 Am. 1 Ga. App. 751, 58 S. E. 232. 



251 DEFINITIONS AND PRINCIPLES. § 3OO2 

§ 3002. Effect of special contract. — If there is no special 
contract of bailment, the liability and duty of the parties is deter- 
mined under a contract implied by law according to the character 
of the bailment."^ But the parties by a special contract may de- 
termine the manner and time of the accomplishment of the bail- 
ment purpose, and may regulate the responsibilities and liabilities 
of the parties to any extent not forbidden by public policy or by 
statute."" So the bailee may be relieved from all liability, or 
may become an insurer, but any enlargement or restriction of 
the liability imposed by law must clearly appear from words of 
express and unambiguous meaning."^ Public policy forbids a 
bailee to contract against the consequences of wilful miscon- 
duct"* or gross negligence,"" it seems, and probably no court would 
uphold a contract making one unaccountable for the acts of his 
agents and servants.'"* 

§ 3003. Compound or mixed bailments. — "Compound bail- 
ments may exist, involving the mingled undertakings of custody, 
carriage, or work upon a thing ; or again, so that one part of the 
service is upon recompense and another gratuitous ; and a bailee's 
liability may shift accordingly."'^ 

§ 3004. Redelivery. — As we have seen, the redelivery of 
the property bailed to the bailor, or the disposal of it as he di- 
rects, after the accomplishment of the bailment purpose, is an es- 
sential element of the bailment contract. The general rule is 
that the identical property delivered must be returned, together 

"" Story Bailments (9th ed.), § 10; '"Lancaster County Nat. Bank v. 

Schouler Bailments (3d ed.), § 20; Smith, 62 Pa. St. 47. See Archer v. 

Hale Bailments, p. 28 ; Conway Bank Walker, 38 Ind. 472. 

V. American Express Co., 8 Allen ™Peek v. North Staffordshire R. 

(Mass.) 512. Co., 10 H. L. Cas. 473, 494. 

"Schouler Bailments (3ded.),§20; '^ Schouler Bailments (3d ed.),§21, 

Story Bailments (9th ed.), §§ 31-36; citing Mariner v. Smith, 5 Heisk. 

Jones Bailments, 48; Hale Bailments, (Tenn.) 203, in which gold was bailed 

p. 28; Patterson v. Wenatchee Can- without reward to be sold if the mar- 

ning Co., 59 Wash. 556, 110 Pac. 379. ket rose to a certain height, other- 

" Trefftz V. Canelli. L. R. 4 P. C. wise only to be kept in custody, and 

277; Belden v. Perkins, 78 111. 449; Preston v. Prather, 137 U. S. 604, 34 

Story Bailments (9th ed.), § 33. L. ed. 788, 11 Sup. Ct. 162, in which 

°* Schouler Bailments (3ded.),§20, by mutual agreement a gratuitous 

citing Story Bailments (9th ed.), bailment was changed into a bail- 

§ 32; Doct. & S. 2 c. 38; Jones Bail- ment for hire, 
ments, 11, 48. 



§ 3005 BAILMENTS. 252 

with all accessions to it during the term of bailment.''^ If the 
purpose of the bailment contemplated that the property should be 
changed in form, as where milk is bailed to a dairyman to be 
returned as cheese and butter, or grain to a miller to be made 
into flour, or cloth to a tailor to be made into clothes, delivery 
in the changed form is expected.'^ And ordinarily delivery of 
other property of the same kind and equal value and quantity is 
not a fulfilment of the obligation to redeliver the specific chat- 
tel.^* But it is held that this rule does not apply to stocks, for 
there is no conceivable reason why another stock certificate of 
precisely similar character is not the precise equivalent of the 
one bailed, though in the case of ordinary bailments there may 
be special reasons for desiring the return of the specific chattel.'^ 
And it is the rule where grain is stored in a common bin with the 
grain of the warehouseman and others, where it is impossible to 
return the exact subject of the bailment, yet the relation is that 
of a bailment and not a sale, and the obligation to redeliver is met 
by returning a like quantity of grain of like quality.'® 

§ 3005. Termination of relation. — If the contract of bail- 
ment is limited as to time, the bailment is ended at the expiration 
of the time, and the bailee must either redeliver the property or 
dispose of it as the owner directs or excuse his failure, and if he 
does not the owner may hold him for conversion, or as having 
renewed the bailment on the same terms.'' When the bailment 
purpose is accomplished either party may end the bailment, the 
bailor by demanding the return of the goods, or the bailee by 
tendering them back to the bailor, in the absence of legal excuse 

"Van Zile Bailments (2d ed.), "Rice v. Nixon, 97 Ind. 97, 49 Am. 

§ 60; Dale v. See, 51 N. J. L. 378, 18 Rep. 430; Sexton v. Graham, 53 Iowa 

Atl. 306, 5 L. R. A. 583, 14 Am. St. 181, 4 N. W. 1090; Ledyard v. Hib- 

688; Ball v. Liney, 48 N. Y. 6, 8 Am. bard, 48 Mich. 421, 12 N. W. 637, 42 

Rep. 511; Holbrook v. Wight, 24 Am. Rep. 474; Bretz v. Diehle, 117 

Wend. (N. Y.) 169, 35 Am. Dec. 607. Pa. St. 589, 11 Atl. 893, 2 Am. St. 

"Stewart v. Stone, 127 N. Y. 500, 706, and note; note 94 Am. St, 221, 

28 N. E. 595, 14 L. R. A, 215n ; and cases cited. 

Schouler Bailments (3d ed.), § 6; "Benje v. Creagh's Admr., 21 Ala. 

Van Zile Bailments (2d ed.), § 61. 151; Green v. HoUingsworth, S Dana 

"Van Zile Bailments (2d ed.), (Ky.) 173, 30 Am. Dec. 680; New 

§ 60 ; Atkins v. Gamble, 42 Gal. 86, 10 York L. E. & W. R. Co. v. New 

Am, Rep. 282. Jersey Elec. R. Co., 60 N. J. L. 338, 

"Atkins V. Gamble, 42 Cal. 86, 10 38 Atl. 828; Cobb v. Wallace, S 

Am. Rep. 282. Cold. (Tenn.) 539, 98 Am. Dec. 43Sa 



253 DEFINITIONS AND PRINCIPLES. § 3OO5 

for non-delivery." As in the case of other contracts, a bailment 
may be terminated at any time by the mutual agreement of the 
parties." Where the bailment is for no fixed time, or is for the 
sole benefit of the bailor, he may terminate it at any time.'" But 
where the bailment is for the sole benefit of the bailee, the bailor 
may not terminate it in such a manner or at such a time as to seri- 
ously injure the bailee, with no particular benefit to himself.^^ 
If the bailment is for mutual benefit, the bailor may not terminate 
the contract except for a breach of the contract or unwarranted 
action inconsistent therewith on the part of the bailee.'^ The 
bailee has always the power to terminate the bailment and at law 
the bailor cannot compel the performance of the contract, nor will 
equity ordinarily decree the performance of personal services.*^ 
But usually the bailee has no right to do so, except in the case of a 
commodate for his own benefit, when he can terminate the con- 
tract at any time by redelivery, and a gratuitous depositary or 
mandatary may usually terminate the contract upon reasonable 
notice to the bailor, by redelivery, but he has no right to abandon 
the undertaking to the injury of the bailor.'* The bailment may 
be terminated by operation of law, as where the status of the 
parties is changed, by the bailee becoming the owner of the prop- 
erty'° or one of the parties on whom the performance of the bail- 
ment purpose depends becoming incompetent, as by bankruptcy, 
or insanity, or by the marriage of a woman under the common 
law.'" So the death of either of the parties will terminate the 

The negligent delivery to the wrong Green v. Hollingsworth, S Dana 

person of a parcel by the bailee's (Ky.) 173, 30 Am. Dec. 680; Crump 

agents for its delivery is a conver- v. Mitchell, 34 Miss. 449; Sargent v. 

sion. Murry v. Postal Tel. &c. Co., Gile, 8 N. H. 32S ; Wentworth v. 

210 Mass. 188, 96 N. E. 316. McDuffie, 48 N. H. 402; King v. 

"See cases cited in note IT, and Bates, 57 N. H. 446; Dunham v. Lee, 

Chattahoochee Nat. Bank v. Schley, 24 Vt. 432; Swift v. Mosley, 10 Vt. 

58 Ga. 369 ; Morse v. Androscoggin 208, 7>Z Am. Dec. 197. 

R. Co., 39 Maine 285; Ouderkirk v. ''See Goddard Bailments, § 27; 

Central Nat. Bank, 119 N. Y. 263, 23 Story Bailments (9th ed.), 202, 258, 

N. E. 875. 271. 

"Story Bailments (9th ed.), §§ 418, ^Goddard Bailments, § 27; Rouls- 

418a ton v. McClelland, 2 E. D. Smith 

™Cobb v. Wallace, 5 Cold. (Tenn.) (N. Y.) 60. 

539, 98 Am. Dec. 43Sn. See Smith v. '^Van Zile Bailments (2d ed.), 

Niles, 20 Vt. 315, 49 Am. Dec. 782. § 81 ; Goddard Bailments, § 33. 

'' Miller v. Dayton, 94 Minn. 340, ™ Goddard Bailments, § 32; Story 

102 N W. 862. Bailments (9th ed.), § 206; Parker 

''Story Bailments (9th ed.), § 413; v. Smith, 16 East 382; Minett v. For- 



§ 3006 BAILMENTS. 254 

contract unless it is of a nature that can be performed by the 
personal representative of the deceased." So where the subject 
of the bailment is destroyed the contract is terminated, for 
there is then nothing upon which the bailment purpose can be 
' Accomplished, but the liabilities of the parties would be gov- 
' erned by the general rules before mentioned.^^ And in many 
cases the effect as to the termination of the contract by any of the 
happenings above mentioned depends upon the character of bail- 
ment. 

§ 3006. Form of action and burden of proof. — The bailor 
may as a rule bring an action either in contract or in tort for loss 
or injury to the goods in the possession of the bailee.*" The 
weight of modern authority holds the rule to be that where the 
bailor has shown that the goods were received in good condition 
by the bailee and were returned by him in an injured or damaged 
condition, or were not returned or delivered over at all, he has 
made out a case of prima facie negligence or misconduct against 
the bailee, if ordinarily such injury or loss could not have oc- 
curred without negligence on the part of the bailee, and the 
bailee must show that the loss or damage was caused without 
his fault."" The effect of this rule is not to shift the burden of 

rester, 4 Taunt. 541; Ex parte New- PI. 151; Coal Co. v. Richter, 31 W. 

hall, 2 Story 360; Van Zile Bailments Va. 858, 8 S. E. 609. See Hackney 

(2d ed.), § 83. V. Perry, 1S2 Ala. 626, 44 So. 1029; 

" Story Bailments (9th ed.), Rhodes &c. Co. v. Freeman, 2 Ga. 

§§ 202-205, 277, 418, 419; Schouler App. 473, 58 S. E. 696; Redel v. :Mis- 

Bailments (3d ed.), § 156; Farrow v. souri Valley Stone Co., 126 Mo. App. 

Bragg's Admr., 30 Ala. 261 ; iMecart- 163, 103 S. W. 568. 
ney v. Carbine, 108 111. App. 282; ""Schouler on Bailments (3d ed.), 

Marvel v. Philips, 162 Mass. 388, 38 § 23 ; Schouler Bailments including 

N. E. 1117, 26 L. R. A. 416, 44 Am. St. Carriers (1905), § 12; Hale Bail- 

370; INIcKeown v. Harvey, 40 Mich, ments, p. 31; Pratt v. Waddington, 

226; Bambrick v. Webster Groves' 23 Ont, L. R. 178, 21 Ann. Cas. 840, 

Assn., S3 Mo. App. 225 ; Blount v. and cases cited in note : Hackney v. 

Hamey, 43 Mo. App. 644; JNIorris v. Perry, 152 Ala. 626, 44 So. 1029; 

Lowe, 97 Tenn. 243, 36 S. W, 1098; Haas v. Taylor, 80 Ala. 459, 2 So. 

Fulton V. Denison Nat. Bank, 26 Tex. 633; Boies v. Hartford & N. H. R. 

Civ. App. 115, 62 S. W. 84; Hunt v. Co., 37 Conn. 272, 9 Am. Rep. 347; 

Rousmanier's Admrs., 8 Wheat. (U. Johnson v. Perkins, 4 Ga. App, 633, 

S.) 174, 5 L. ed. 589. 62 S. E. 152; Bates v. Capital State 

°»New York L. E. & W. R. Co. v. Bank, 18 Idaho 429, 110 Pac. 277; 

New Jersey &c. R. Co., 60 N. J. L. Cumins v. Wood, 44 111, 416, 92 Am. 

338, 38 Atl. 828; Goddard Bailments, Dec. 189; Funkhouser v. Wagner, 62 

§ 3^- 111. 59; Lichtenhein v. Boston &c.' R. 

Schouler Bailments including Co., 11 Cush. (Mass.) 70; Yazoo &c 

Carriers (1905), § 12, citing 1 Chitty R. Co. v. Hughes, 94 Miss. 242, 47 



255 DEFINITIONS AND PRINCIPLES. § 3OO7 

proof from the plaintiff to the defendant, but simply the burden 
of proceeding. The plaintiff must in all instances prove that the 
bailee was negligent, but when he shows that the goods were in- 
jured while in the hands of the bailee, or were not delivered upon 
demand, he has made out a prima facie case, or created a pre- 
sumption of negligence, which the defendant may overcome by 
offering evidence to show that he was not negligent, or by show- 
ing that the cause of the loss, injury or nondelivery was fire, 
theft, accident or some other excusable cause, and if he produces 
such evidence, the plaintiff in order to make out his case must 
show that the defendant was in fact negligent, and that his neg- 
ligence caused the loss or contributed thereto. It has been held 
that the bailee has sufficiently exonerated himself from liability 
when he has shown that the cause of the loss was a mystery.*^ 

§ 3007, Distinction between bailment and debt, sale or gift. 
— In the civil law there was a contract known as the mutuum, or 
the loan of consumable goods, in which the recipient of the goods 
was to return, not the same identical property as in the case of 
a bailment, but other goods of the same kind.°^ Under the com- 
mon laAV this would not be a bailment, but a sale, which is a 
transfer of the absolute or general property in a thing for a 
price."* The distinction between bailment and sale is clear. In 
bailment the title to the property does not pass to the bailee, but 

So. 662, 22 L. R. A. (N. S.) 97Sn; " Sanford v. Kimball, 106 Maine 
Levi V. Missouri &c. R. Co., 157 Mo. 355, 76 Atl. 890, 138 Am. St. 345. 
App. 536, 138 S. W. 699; Wiser v. "'Street, Foundations of Legal 
Chesley, 53 Mo. 547; Sulpho-Saline Liability, vol. 2, p. 3; Schouler Bail- 
Bath Co. V. Allen, 66 Nebr. 295, 92 ments (3d ed.), § 6; Hale Bailments, 
N. W. 354, 1 Am. & Eng. Ann. Cas. p- 8. When an identical thing is to 
21, and note ; Collins v. Bennett, 46 N. be restored, though in an altered 
y. 490 ; Wintringham v. Hayes, 144 N. form, the contract is one of bailment, 
Y. 1, 38 N. E. 999, 43 Am. St. 725 ; Sey- but when the obligation is to restore 
bolt V. New York L. E. & W. R. Co., other things of the like kind, and 
95 N. Y. 562; Hasbrouck v. New equal in value, it becomes a debt. 
York Central R. Co., 137 App. Div. Wetherell v. O'Brien, 140 111. 146, 33 
(N. Y.) 532, 122 N. Y, S. 123; Allen Am. St. 221. See Baker v. Pnebe, 
'V. Fulton Motor Car Co., 128 N. Y. 59 Nebr. 597, 81 N. W. 609; Smith 
S, 419, 71 Misc. 190; Oswego Bank v. Clark, 21 Wend. (N. Y.) 83, 34 
V Dovle 91 N Y. 32, 43 Am. Rep. Am. Dec. 213n; Carpenter v. Griffin, 
634; Safe Deposit Co. v. Pollock, 85 9 Paige (N. Y.) 310, 37 Am. Dec. 
Pa. St. 391, 27 Am. Rep. 660; Glea- 396. 

son V. Beers' Estate, 59 Vt. 581, 10 "^ Benjamin Sales (7th ed.), § 1; 

Atl. 86, 59 Am. Rep. 757; Pregent Tiffany Sales (1908), 1. 
V. Mills, 51 Wash. 187, 98 Pac. 328. 



§ Z'^^7 BAILMENTS. 256 

only the possession; in a sale the title passes to the vendee at 
once. But in actual practice it is difficult to determine in many 
instances whether a transaction constitutes a bailment or a sale. 
As we have seen, where grain in a warehouse is commingled with 
the grain of others, even though redelivery of the exact grain is 
impossible, the transaction is held a bailment, and the title to the 
grain remains in the one who deposited it in the warehouse, the 
depositors being held owners in common of the common mass."* 
So the general rule is that where goods are delivered to be 
manufactured and the product returned, it is a bailment.''^ Where 
animals are left on shares, the same animals to be returned, it is 
a bailment;"" if an equal number of like value, it is a sale.°^ 
There may be a bailment with the option of purchasing,''^ or a 
bailment for the purpose of sale,"" and perhaps the most difficult 
distinction to be made is between such bailments as these and 
conditional sales. In a recent case it was said as to the distinc- 
tion, "In bailment the identical thing delivered is to be restored, 
or the proceeds after sale. In a sale there is an agreement, ex- 
press or implied, to pay money or its equivalent for the thing 
delivered, and there is no obligation to return. Has the sender 
the right to compel a return of the thing sent, or has the receiver 

"' See cases cited in note 76. Humphreys, 10 Pa. St. 217 ; Brown v. 

"A mere bailment, and not a sale Hitchcock, 28 Vt. 452; note, 94 Am. 

which passes title, is created by a St. 216, et seq. But compare Prich- 

contract under which farmers deliver ett v. Cook, 62 Pa. St. 193 ; Buffum v. 

produce at a factory owned by one Merry, 3 Mason (U. S.) 478, Fed. 

of them, to be manufactured into Cas. No. 2112; Laflin & Rand Pow- 

pickles and similar articles, the pro- der Co. v. Burkhardt, 97 U. S. 110, 

ceeds of the sales of which are to be 24 L. ed. 973. 

divided in a certain ratio between the "Robinson v. Haas, 40 Cal. 474; 

farmers and the manufacturer, espe- Woodward v. Edmunds, 20 Utah 118, 

cially where the intention of the par- 57 Pac. 848; Manti City Savings 

ties was to create a bailment. Sat- Bank v. Peterson, 30 Utah 475, 86 

tier V. Hallock, 160 N. Y. 291, 54 N. Pac. 414, 116 Am. St. 862. 

E. 667, 46 L. R. A. 679, 73 Am. St. "'Wilson v. Finney, 13 Johns. (N. 

686. Where one party was to furnish Y.) 358. 

part of the materials, to which the "^McCall v. Powell, 64 Ala. 254; 

second party was to add other mate- cases cited 94 Am. St. 226n ; Wiggins 

rials, and to perform work and labor v. Tumlin, 96 Ga. 753, 23 S. E. 75 ; 

so as to manufacture shears for the Dunlap v. Gleason, 16 Mich. 1S8, 93 

first party, it was a bailment. Mack Am. Dec. 231; Sargent v Gile, 8 N. 

V. Snell, 140 N. Y. 193, 35 N, E. 493, H. 325 ; Hamilton v. Billington, 163 

37 Am. St. 534n. See Barker v, Rob- Pa, St. 76, 29 Atl. 904. 43 Am. St. 

erts, 8 Greenl. (Maine) 101; Pierce 780; Barnett v. Fein, 41 Pa. Super. 

V. Schenck, 3 Hill CN. Y.) 28; Stew- Ct. 423. 

art V. Stone, 127 N. Y. 500, 28 N. "Fleet v. Hertz, 201 lU. 594, 66 

E. S9S, 14 L. R. A. 21Sn; King v. N. E. 858, 94 Am. St 192n; 



257 



DEFINITIONS AND PRINCIPLES. 



§ 3007 



the option to pay for the thing in money ?"^ In any case the 
answer to the last question is perhaps the best test of whether a 
transaction is a sale or a bailment. A gift is distinguished from 
a bailment by the fact that a gift passes ownership and not pos- 
session only.^ Where the relationship of debtor and creditor 
exists, then there is an absolute obligation upon the debtor to 
return a sum of money to the creditor, but there may be a bail- 
ment of money for custody, if the identical money received was 
simply to be kept and returned, and it has been held that there 
may be a bailment of money when it is not agreed or intended 
that the identical money shall be returned.* 



Sturtevant Co. v. Dugan, 106 
Md. 587, 68 Atl. 351, 14 Am. & Eng. 
Ann. Cas. 675; Chesterfield Mfg. Co. 
V. Dehon, 5 Pick. (Mass.) 7, 16 Am. 
Dec. 367; Walker v. Butterick, 105 
Mass. 237; Barnes Safe & Lock Co. 
V. Bloch Bros. Tobacco Co., 38 W. 
Va. 158, 18 S. E. 482, 22 L. R. A. 
SSOn, 45 Am. St. 846. 

^ Sturtevant Co. v. Dugan, 106 Md. 
587, 68 Atl. 351, 14 Am. & Eng. Ann. 
Cas. 675, citing In re Gait, 120 Fed. 64, 
56 C. C. A. 470 ; In re Columbus Buggy 
Co.. 143 Fed. 859, 74 C. C. A. 611; 
John Deere Plow Co. v. McDavid, 
137 Fed. 802, 70 C. C. A. 422. See 



also, Lippincott v. Scott, 198 Pa. 283, 
47 Atl. 1115, 82 Am. St. 801; Brown 
V. BiUington, 163 Pa. St. 76, 29 Atl. 
904, 43 Am. St. 780; Wheeler &c. 
Mfg. Co. V. Heil, 115 Pa. 487, 8 
Atl. 616, 2 Am. St. 575 ; note, 94 Am. 
St. 234-258; In re A. Gaglione & 
Son, 200 Fed. 81. 

'Van Zile Bailments (2d ed.), § 25. 

°Knapp V. Knapp, 118 Mo. App. 
685, 96 S. W. 295. For other cases 
involving bailments of money, see 
Stevens v. Stevens, 132 Mo. App. 
624, 112 S. W. 35; Patriska v. Kronk, 
57 Misc. (N. Y.) 552, 109 N. Y. S. 
1092. 



17 — Contracts, Vol. 4 



CHAPTER LXIX. 



GRATUITOUS BAILMENTS. 



§ 3010. For benefit of bailor— De- § 3018. Bailee's rights against bailor 
fined and distinguished. or third parties. 

3011. Mandates. 3019. The finder of lost property. 

3012. Deposits. 3020. Special bank deposits. 

3013. Delivery and acceptance. 3021. Termination of relation and 

3014. Use of the property and ex- redelivery. 

penses. 3022. For benefit of bailee — Gratu- 

3015. Bailee's duty to perform bail- itous loans— The commo- 

ment contract. date. 

3016. Care to be used by bailee in 3023. Creation of the relation. 

accomplishing the bailment 3024. Bailee's rights and obliga-- 
purpose. tions. 

3017. Effect of failure to obey in- 3025. Bailor's rights and duties. 

structions, or to give special 3026. The care demanded of the 
care on notice that such bailee, 

is necessary. 3027. Redelivery. 

§ 3010. For benefit of bailor — Defined and distinguished. 

— The distinguishing characteristic of this class of bailments is 
that the bailee receives no benefit from or recompense for the 
accomplishment of the bailment purpose, and since this is true, is 
held to a less degree of care in its performance than in the other 
classes of bailments. These bailments include the same kinds of 
services that are embraced in contracts of hiring, that is, i, keep- 
ing the property in custody, or deposit ; 2, performing vi^ork upon 
a thing, and 3, carrying a thing from place to place, these latter 
kinds coming under the one classification of mandate. In both 
deposit and mandate there must be labor performed to a certain 
extent upon the subject of the bailment, but the distinction is, as 
stated by Judge Story, that in case of a deposit, the principal 
object is the keeping of the thing, and any services connected 
with such custody are merely accessorial ; while in case of a man- 
date, the principal object is the performance of services, and the 
custody is merely accessorial.^ If there is the slightest benefit or 

'Story Bailments (9th ed.), § 41, et seq. 

258 



259 GRATUITOUS BAILMENTS. § 3OII 

recompense to the bailee, the bailment is held one for mutual 
benefit, and the bailee is held to the care demanded in bailments 
for mutual benefit, so that it frequently becomes important to 
decide whether any benefit is received by him, even indirectly. 
So it is held that the bailment is one of mutual benefit if it was 
undertaken at the request of the bailee, as where upon invitation 
of a society in charge property was sent to a fair for exhibition.^ 
And the same rule applies if there is no direct compensation for 
the bailment, but it is an incident of an occupation conducted for 
profit, application of this rule holding a clothing merchant liable 
for the ordinary care of articles of clothing removed by prospect- 
ive customers while trying on garments in his shop,^ and the pro- 
prietor of a bath house under a similar duty as to valuables which 
his patrons deposited in his keeping while bathing, and for the 
care of which he received no direct compensation.* 

§3011. Mandates. — ^The Roman mandatum was not an 
entirely similar relation to the mandate of the English law of 
bailments, for under the Roman law the mandatary might under- 
take to deliver an oral message gratuitously, and was in fact a 
gratuitous agent. ° The mandate must be created by contract, 
but this contract may be verbal or in writing, or may in certain 
circumstances be implied.' 

§ 3012. Deposits. — The depositum of the Roman law was 
a relation including more than our deposit, which is a mere naked 
bailment of goods to be kept without reward and returned to the 
bailor on demand.'' In the law of bailments, the term "deposit" 
has a restricted meaning. This is evidenced in the case of bank 
deposits. The ordinary bank deposit is not a bailment, but a loan, 

= Prince v. Alabama State Fair, 106 89, 6 L. R. A. (N. S.) 828n, 115 Am. 

Ala. 340, 17 So. 449, 28 L. R. A. 716; St. 114. See cases cited in note, 

Vigo Agricultural Society v. Brum- § 3079, infra. 

fiel, 102 Ind. 146, 1 N. E. 382, 52 Am. " Goddard Bailments, § 42 ; Van 

Rep. 657. Zi'fi Bailments (2d ed.), § 85; Schou- 

'See Woodruff v. Painter, 150 Pa. ler Bailments (3d ed.), § 26. 

St. 91, 24 Atl. 621, 16 L. R. A. 451. "Story Bailments (9th ed.), § 160; 

See cases cited under note, § 3079, Van Zile Bailments (2d ed.), § 85. 

infra ' Bates v. Capital State Bank, 18 

'Walpert v. Bohan, 126 Ga. 532, 55 Idaho 429, 110 Pac. 277. 
S. E. 181, 8 Am. & Eng. Ann. Gas. 



§ 3013 BAILMENTS. 260 

since the same money deposited is not to be returned. Neither is 
it gratuitous, for the bank has the use of the money.** But the 
relation of a gratuitous bailee sometimes exists as to special de- 
posits in a bank for custody. The relation of deposit is one of 
contract, but often of implied contract, and not express, as in the 
instance of the finder of lost property, or the public officer who 
is by law made the depositary of funds, or the sheriff who seizes 
goods, or the clerk of court to whom money is paid as a specific 
deposit, or a stake holder of property." These latter relations are 
often spoken of as quasi-deposits. There are also bailments by 
operation of law which are called involuntary deposits, and which 
arise when the goods of one person have by an unavoidable acci- 
dent or casualty been deposited upon another's land, as where cast 
upon another's land by a freshet, or blown there by a tempest or 
tornado; and the owner of land is under a duty as to such goods 
similar to that of the finder of lost property." 

§ 3013. Delivery and acceptance. — Delivery in this class 
of bailments is physical, since the bailee must have actual pos- 
session in order to be charged as bailee, but it may be constructive, 
as where the goods were already in the possession of the bailee 
for some other purpose. ^^ Acceptance must be voluntary, for 
no man can be compelled involuntarily to become a gratuitous 
bailee, and the finder of lost property is not chargeable except he 
voluntarily take charge of such property, for he may leave it 
where he found it, and not become a bailee.^" Perhaps an excep- 

' Story Bailments (9th ed.), §§ 84, holders"; Story Bailments (9th ed.), 

88- Wright V. Paine, 62 Ala. 340; §§ 45, 103, 124; In re Western Marine 

Howard v. Roeben, 33 Cal. 399; & Fire Ins. Co., 38 111. 289; Mott v. 

Brahm v. Adkins, 77 111. 263 ; Foster Pettit, 1 N. J. L. 298. 

V. Essex Bank, 17 Mass. 479, 9 Am. "Story Bailments (9th ed.), § 83a; 

Dec, 168; Rankin v. Craft, 1 Heisk. Goddard Bailments, § 47; Hale Bail- 

(Tenn.) 711; Miller J., in Marine ments, p. 44; Anthony v. Haney, 8 

Bank v. Fulton Bank, 2 Wall. (U. Bing. 186; Mitten v. Fandrye, Poph. 

S ■) 252, 17 L. ed. 785. 161, Latch 13; Nicholson v. Chap- 

•Schouler Bailments (3ded.),§28; man, 2 H. Bl. 254; Walker v. Nor- 

Story Bailments (9th ed.), § 124; folk &c. R. Co., 67 W. Va. 273, 67 S. 

Harrington v. Kins;, 121 Mass. 269; E. 722. 

State V. Fitzpatrick, 64 Mo. 185; " Schouler Bailments (3d ed.), § 32; 

Cross V. Brown, 41 N. H. 283 ; Burke Story Bailments (9th ed.), §§ 51, 

V. Trevitt, 1 Mason (U. S.) 96, Fed. 141 ; Coggs v. Bernard, 2 Ld. Raym. 

Cas. No. 2163; Thayer v. Hutchin- 909. 

son, 13 Vt. 504, 37 Am. Dec. 607; "Drake v. Shorter, 4 Esp. 165 •, 

Bouv. Diet., "Sequestration," "Stake- Kohler v. Hayes, 41 Cal. 455; Bobo 



26l GRATUITOUS BAILMENTS. § 3OI4 

tion must be made in the case of "involuntary depositaries" who 
become bailees through the force of natural circumstances over 
which they have no control. 

§ 3014. Use of the property and expenses. — The deposi- 
tary has generally no right to use the property deposited, except 
so far as the use of the thing is necessary to its preservation, or 
incidental to the proper performance of his duties; thus a cow 
must be milked, and a horse given exercise.^^ If the bailee were 
to gain advantage from the use, the bailment would cease to be 
gratuitous. The depositary who uses the property more than is 
contemplated by the contract of bailment is liable in breach of 
contract, or in some instances for conversion.^^ Bailees for the 
sole benefit of the bailor are entitled to recover from the bailor 
all expenses necessarily incurred in preserving a deposit, or in 
carrying out a mandate.^' If the bailee has contracted with a 
third party for any necessary services, such contract is binding 
upon the bailor.^" If the expenses were reasonably incurred, the 
bailor is liable, even if they were more than he would have paid, 
unless they were caused by the bailee's fault.^^ 

§ 3015. Bailee's duty to perform bailment contract. — The 

rule is settled that after one has undertaken the performance of 
a gratuitous bailment, he is under a legal liability for its proper 
performance under the circumstances, and thus may be held by 
the bailor for his misfeasance; but if he has merely agreed to 
undertake the performance, he is not liable for a failure to enter 

V. Patton, 6 Heisk. (Tenn.) 172, 19 rath, 54 Md. 491, 39 Am. St. 397; 

Am. Rep. S93; Sturm v. Boker, ISO King v. Bates, 57 N. H. 446; Keiner 

U. S. 312, 37 L. ed. 1093, 14 Sup. Ct. v, Folsom, 79 N. Y S. 1099; Dale v. 

99. The gratuitous bailee must as- Brinckerhoff, 7 Daly (N. Y.) 45 ; 

sent to the bailment expressly or im- Cicalla v. Rossi, 10 Heisk. (Tenn.) 

pliedly before the relationship of 67. 

bailor and bailee is established. Bios- "Story Bailments (9th ed.), §§ 121, 

ser Co. V. Doonan, 8 Ga. App. 285, 154; Schouler Bailments (3d ed.), 

68 S. E. 1074. § 63; Devalcourt v. Dillon, 12 La. 

''Jones Bailments, 80, 81; Story Ann. 672; Harter v. Blanchard, 64 

Bailments (9th ed.), § 90; Schouler Barb. (N. Y.) 617. 

Bailments (3d ed.), § 52; Mores v. "Story Bailments (9th ed.), § 198; 

Conham, Owen 123; Anon., 2 Salk. Harter v. Blanchard, 64 Barb. (N. 

521. Y.) 617. 

"Clark V. Whitaker, 19 Conn. 319, "Story Bailments (9th ed.), § 197. 
48 Am. Dec. 160; Schermer v. Neu- 



§ 30l6 BAILMENTS. 262 

upon it." The reason for this is that the consideration which 
supports a gratuitous bailment is the deUvery of possession of 
the subject of the bailment, and that there is no consideration for 
a mere promise to undertake a bailment ; and thus there is no lia- 
bility until the actual delivery of the property to the bailee. 

§ 3016. Care to be used by bailee in accomplishing the 
bailment purpose. — As was said in a preceding section, the 
bailee who undertakes a deposit or mandate for the bailor's sole 
benefit, he himself receiving no benefit, is held by the general 
rule to slight diligence in the performance of the bailment pur- 
pose.^° The test of this must depend upon circumstances, and 
sometimes upon custom.^" If it is shown that the gratuitous 
bailee used the same care that he used with his own goods, this 
furnishes a presumption that he was not negligent,^^ yet he might 
have been so careless with his own goods that he used less than 
slight diligence as to their care. Some of the cases hold such a 
bailee to the degree of care used by men of common prudence 
for the protection of their own property in similar conditions, 
yet this rule seems to recognize no distinction between the care 
demanded of gratuitous bailees, and that demanded of bailees 
upon recompense."^ It would seem that perhaps the best test is 
the amount of care which gratuitous bailees are accustomed to 
take of similar goods under similar circumstances.^^ If skill is 



"Elsee V. Gatward, S T. R. 143; kins v. Saltmarsh, 14 Serg. & R. 

Taylor v. Plummer, 3 M. & S. 562; (Pa.) 275. 

Morrison v. Orr, 3 Stew. & P. (Ala.) "'Story Bailments (9th ed.), § 64; 

49; Thorne V. Deas, 4 Johns. (N. Y.) Schouler Bailments (3d ed.), § 36; 

84; French v. Reed, 6 Bin. (Pa.) Doorman v. Jenkins, 2 Ad. & E. 256; 

308, 23 Am. Dec. 319; Tancil v. Coggs v. Bernard, 2 Ld. Raym. 909; 

Seaton, 28 Grat. (Va.) 601, 26 Am. Kettle v. Broomsall, Willes 118; 

Rep, 380. Shiells v. Blackburne, 1 H. Bl. 159; 

" See § 3000, supra, and cases cited. Foster v. Essex Bank, 17 Mass. 479, 

Chicago Hotel Co. v. Baumann, 131 9 Ara. Dec. 168: Bland v. Womack, 

111. App. 324; Stevens v. Stevens, 132 2 Murph. (N. Car.) 373; Tracy v. 

Mo. App. 624. 112 S. W. 35; Patriska Wood, 3 Mas. (U. S.) 132. 

V. Kronk, 57 Misc. (N. Y.) 552, 109 "" Gray v. Merriam, 148 111. 179, 35 

N. Y. S. 1092. N. E. 810, i2 L. R. A. 769, 39 Am. St. 

™ Schouler Bailments (3d ed.), 172; Preston v. Prather, 137 U. S. 

§ 37; Batson v. Donovan, 4 B. & Aid. 604, 34 L. ed. 788, 11 Sup. Ct. 162. 

21; Ross V. Daugherty, 127 111. App. "'Finucane v. Small, 1 Esp. 315; 

572 ; Eddy v. Livingston, 35 Mo. 487, Gray v, Merriam, 148 111. 179, 35 N. 

88 Am. Dec. 122; Griffith v. Zipper- E. 810, 32 L. R. A. 769n, 39 Am. St. 

wick Lodge, 28 Ohio St. 388; Tomp- 172; Bean v. Ford, 65 Misc. (N. Y.) 



263 GRATUITOUS BAILMENTS. § 3OI6 

required in the carrying out of the bailment purpose, nothing 
more can be demanded of the bailee than the skill of the average 
person of the same profession or occupation who undertakes such 
things, and it seeins that less skill than this would still be slight 
skill, and all the bailor was entitled to demand, but the failure to 
use any skill would be gross negligence.^* Though some courts 
have attempted to get away from the rule of sHght diligence and 
fix the degree of care by the mutual understanding of the par- 
ties,^^ yet the rule supported by the weight of authority is that 
"the bailee's liability in bailments under the present head must 
be, apart from special contract modifications, such a degree of 
diligence, less than what the average of mankind under the same 
conditions and circumstances are wont to exert with reference 
to similar property, as may be relatively termed slight diligence ; 
that, correspondingly, he is liable only for what the law terms 
great or gross negligence; and that, of course, for dishonesty 
and bad faith in performing the transaction, he becomes, as a 
matter of course, liable. But it is here essential that the bail- 
ment be undertaken gratuitously and without the expectation 
of reward."^" 

481, 119 N. Y. S. 1074; Bland v. posed to extend, by inference, the 

Womack, 2 Murph. (N. Car.) 373; perils of an unprofitable trust ;_ and 

Anderson v. Foresman, Wright so every bailee without reward is re- 

(Ohio) 508; Tracy v. Wood, 3 garded as having assumed the least 

Mason 132. responsibility consistent with his ac- 

"^Shiells V. Blackburne, 1 H. HI. tual undertaking. Christian v. First 

159; Conner v. Winton, 8 Ind. 315, Nat. Bank, 155 Fed. 705, 84 C. C. A. 

65 Am. Dec. 761 ; Gill v. Middleton, 53. Among cases which exemplify 

105 Mass. 477, 7 Am. Rep. 548 ; Eddy the rule that the gratuitous bailee for 

v. Livingston, 35 Mo. 487, 88 Am. the benefit of the bailor is liable for 

Dec. 122; Stanton v. Bell, 2 Hawks gross negligence, are the follov.-ing: 

(N. Car.) 145; First Nat. Bank v. In the leading case of Coggs v. Ber- 

Graham, 79 Pa. St. 106, 21 Am Rep. nard, 2 Ld. Raym. 909, one who 

49. gratuitously undertook to carry casks 

^* Mariner v. Smith, S Heisk. of brandy from one cellar to another 

(Tenn.) 203. did the work so carelessly that he 

^ Schouler Bailments Including broke one of the casks, spilling its 

Carriers (1905), § 35. For cases contents, and was held liable for the 

holding to this rule, see Coggs v. loss. So a gratuitous bailee who 

Bernard, 2 Ld. Raym. 909; Gray v. turned a horse after dark into a 

Merriam, 46 111. App. 337, affd., 148 dangerous pasture to which it was 

111. 179, 35 N. E. 810, 32 L. R. A. unaccustomed was liable for injuries 

769, 39 Am. St. 172; Hibernia Build- caused thereby. Rooth v. Wilson, 1 

ing Assn. v. McGrath, 154 Pa. St. B. & Aid. 59. A person gratuitous- 

296, 35 Am. St. 828. See cases cited ly undertook to carry two bags of 

in preceding notes. It was said in gold from New York tO' Boston and 

a recent case that courts are indis- brought the gold in a valise together 



§ 30I7 



BAILMENTS. 



264 



§ 3017. Effect of failure to obey instructions, or to give 
special care with notice that such is necessary, — The bailee 
is held to a degree of diligence in obeying the instructions of the 
bailor, and for loss caused by failure to comply therewith, under 
circumstances amounting to gross negligence, he is liable. ^^ He 
may by special contract increase his liability, and the law will 
enforce it if he is foolish enough to do so.^^ If the bailee has no- 
tice of facts requiring special care, the degree of diligence which 
he must use is affected by his knowledge of such facts, as where 
a clerk receipted for a registered letter for a guest of a hotel, he 
was held to have notice that the letter was of more than ordinary 
importance from the signing of the receipt, and having put the 
letter in the hotel letter box, from which it was stolen, he was 



with gold money of his own on 
board the vessel the night before it 
was to sail and left it in another 
cabin which he occupied. In the 
morning he found one bag of gold 
missing, left the valise on his cabin 
table and went to inform the ship's 
authorities. When he returned he 
found the other bag missing. He 
had been told that if his valise was 
valuable, he had better give it to the 
clerk. Though he used the same care 
for the goods gratuitously carried 
that he did for his own the court 
held that it was a question for the 
jury whether he had not been guilty 
of gross negligence. Tracy v. Wood, 
3 Mas. (U. S.) 132. Sending loose 
money through the mails unauthor- 
izedly may be gross negligence. Jen- 
kins V. Bacon, HI Mass. i72, 15 Am. 
Rep. 23. One who has allowed a 
prior tenant's stove to remain in his 
office for some time and then without 
notice to the owner puts it out in a 
vacant lot, exposing it to injury, has 
been guilty of gross negligence. Burk 
V. Dempster, 34 Nebr. 426, 51 N. W. 
976. But where an applicant for a 
license to practice medicine sent his 
diploma to the board of health with 
a request for the issue of a license, 
and the board received the diploma, 
and passed upon it, and according to 
their custom, placed it in a mailing 
case, properly directed to the appli- 
cant, and delivered it to the Adams 
Express Company which had an of- 



fice at the place of sending, and at 
the place of delivery to the applicant, 
and further, the applicant had given 
no instructions as to how the diploma 
was to be returned, and had not fur- 
nished funds to pay for its return, 
and the applicant received the mail- 
ing case, but the diploma had been 
lost from it, it was held that the se- 
lection of the carrier and delivery 
of the diploma to it for return were 
not actionable negligence on the part 
of the secretaries of the board ren- 
dering them personally liable for the 
loss of the diploma. Whiteside v. 
Adams Express Co., 89 Nebr. 430, 
131 N. W. 953. 

"Stewart v. Frazier, 5 Ala. 114: 
Ferguson v. Porter, 3 Fla. 27; Fel- 
lowes v. Gordon, 8 B. Mon. (Ky.) 
415; McCau^ey v. Davidson, 10 Minn. 
418; Cannon R. l\Ifg. Co. v. First 
Nat. Bank, 2,7 Minn. 394, 34 N. W. 
741 ; Colyar v. Taylor, 1 Cold. 
(Tenn.) 372. A gratuitous bailee is 
bound to obey bailor's instructions to 
procure insurance on stored property. 
Schroeder v. Mauzy, 16 Cal. App. 
443, 118 Pac. 459. The rule that a 
gratuitous bailee is not liable for 
mere misfeasance does not apply 
when the subject of the bailment has 
been actually delivered and accepted 
bv him. Herzig v. Herzig, 67 Misc. 
(N. Y.) 2S0, 122 N. Y. S. 440. 

^ Schouler Bailments (3d ed.), 
§ SI ; Clark v. Gaylord, 24 Conn. 484. 



265 GRATUITOUS BAILMENTS. § 3018 

liable for the loss of the money contained in it.^' But if the 
bailor has notice of the general character and habits of the 
bailee, and the character of his facilities for performing the bail- 
ment purpose, he is held to have contracted with this in mind, 
and if the goods have been lost under circumstances so that 
it can be said that he contracted for them to be kept in such man- 
ner, the bailor must bear the loss, for he did not need to trust 
them to such a bailee/" In fixing the duty of a bailee who re- 
ceives articles in a sealed package, it is important to ascertain 
whether he knew or should have known the character of the con- 
tents, for what might be high diligence in the care of a box of 
old papers might be gross negligence in the care of a casket of 
jewels.'^ And if he did not know their character, in the absence 
of fraud or concealment on the part of the bailor, he is liable for 
their true value if lost through his gross negligence.'^ 

§ 3018. Bailee's rights against bailor or third parties. — It 

is said that the bailor cannot be liable in contract to the bailee for 
damage sustained in executing the bailment contract, since if 
danger was not foreseen, the bailor cannot be said to have con- 
tracted to indemnify the bailee; and if the danger was foreseen, 
the bailee is held to have assumed it/^ So the bailor is not liable 
in tort unless in making the bailment he knew of danger likely 
to occur, and was negligent in failing to warn the bailee.^* The 
gratuitous bailee has a right of possession sufficient to allow him 
to bring an action against a third party for damage caused to the 
property bailed, or for trespass or conversion.^' 

""Joslyn V. King, 27 Nebr. 38, 42 ''Hale Bailments, p. 54, citing 

N. W. 7S6, 4 L. R. A. 457, 20 Am. Paley, Moral Phil. bk. 3, ch. 12. 

St. 656. " Jaggard Torts, 87 ; Day v. Brown- 

'"Knowles v. Railroad Co., 38 rigg, 10 Ch. Div. 294; Backhouse v. 

Maine 55, 61 Am. Dec. 234; Conway Bonomi, 9 H. L. Cas. 503; Gagnon 

Bank v. American Exp. Co., 8 Allen v. Dana, 69 N. H. 264, 39 Atl. 982, 

(Mass.) 512; Arthur v. Railway Co., 41 L. R. A. 389, 76 Am. St. 170; 

38 Minn. 95, 35 N. W. 718. Rich v. New York Cent. & H. R. R. 

"Story Bailments (9th ed.), %77; Co., 87 N. Y. 382. 

Hale Bailments, p. 69. '" Schouler Bailmments (3d ed.), 

''France v. Gaudet, L. R. 6 Q. B. § 54;, 2 Kent Coni. 568, 585; 2 BI. 

199; Wilson v. Railway Co., 9 C. B. Cora. 395, 452; Story Bailments (9th 

(N. S.) 631; Little v. Boston & M. ed.), §§ 94, 133; Armory v. Dela- 

R. R. Co., 66 Maine 239; Mather v. mirie, ] Strange 505; Harrington v. 

American Express Co., 138 Mass. 55, King, 121 Mass. 269; Brown v. Shaw, 

52 Am. Rep. 258. 51 Minn. 266, 53 N. W. 633; Cham- 



S 3019 BAILMENTS. 266 

§ 3019. The finder of lost property.— The finder of lost 
property who takes the same in his possession becomes the gra- 
tuitous depositary for the owner thereof. His right to the prop- 
erty is absolute as against all the rest of the world/* and it has 
often been held that where the property was found in the chat- 
tels of an employer, or on his premises, the finder's rights were 
superior to those of the employer.^' It seems that for the mere 
act of finding he is entitled to no recompense, but for expendi- 
tures incident to finding it and possessing himself of it, and ex- 
pended in good faith for its care and protection, he is entitled to 
compensation from the owner, it being held that he takes the 
property under an implied request from the owner to all persons 
to take the property and care for it for him, and to recompense 
them for necessary expenditures in so doing.^^ The finder is not 
entitled to a lien upon the property to secure his expenditures, 
unless it is provided for by statute, as in some cases where animals 
astray or logs adrift are taken in, or unless the owner has offered 
a reward for the return/" The liabihties and duties of the finder 
of lost property are in general those of any other gratuitous de- 
positary. 

§ 3020. Special bank deposits. — Where money, gold, 
stocks, bonds or valuable papers are deposited with a bank upon 
the understanding tliat the identical thing shall be returned, it 
is a bailment, and if no recompense is charged, a gratuitous bail- 
ment, and the bank is held to the general rules regarding gratu- 

berlain v. West, Zl Minn. 54, 33 N. could keep the bills as against the 

W. 114; New York & Harlem R. Co. owner of the safe.) ; Bowen v. Sul- 

V. Haws, 56 N. Y. 175 ; Abrahamovitz livan, 62 Ind. 281, 30 Am. Rep. 172 

V. New York City R. Co., 104 N. Y. (where an employe found money in 

S. 653; Galveston H. & S. A. R. Co. old rags which she was sorting to 

V. Zantzinger, 93 Tex. 64, 53 S. W. make paper) ; Hamaker v. Blanchard, 

379, 47 L. R. A. 282, 77 Am. St. 829; 90 Pa. St. Zll, 35 Am. Rep. 664 

Thayer v. Hutchinson, 13 Vt. 504. (where a domestic servant found bills 

""Lawrence v. Buck, 62 Maine 275; in a hotel parlor). 
Hoagland v. Forest Park &c. Amuse- "' Reeder v. Anderson's Admrs., 4 

ment Co., 170 Mo. 335, 70 S. W. 878, Dana (Ky.) 193; Chase v. Corcoran, 

94 Am. St. 740 ; Tancil v. Seaton, 28 106 Mass. 286. 
Grat. (Va.) 601, 26 Am. Rep. 380. ''Preston v. Neale, 12 Gray 

"Dnrfee v. Jones, 11 R. I. 588, 23 (Mass.) 222; Wentworth v. Day, 3 

Am. Rep. 528 (Where the depositary Mete. (Mass.) 352; Wood v. Pierson, 

of an old safe to sell found a roll 45 Mich. 313, 7 N. W. 888; 4 Cum- 

of bills concealed therein, the finder mings v. Gann, 52 Pa. St. 484. 



267 GRATUITOUS BAILMENTS. § 302I 

itous bailments for the benefit of the bailor."" In the leading case 
it was held that the bank was not liable for the theft by its cashier 
of bags of gold on special deposit, because the fraud or felony 
of its agents was beyond the scope of their employment, and 
the bank was not liable, except for their negligence."^ But it is 
said that the bank would be liable, if the directors had knowledge 
of acts upon the part of its cashier which should put them on 
their guard against his misconduct toward depositors."^ Nor can 
a cashier of a bank bind the bank by receiving such deposits un- 
less he has authority, express or implied, but such authority may 
be implied from custom known to the directors.*^ If the prop- 
erty is lost by burglars taking it from the vault, the bank is not 
liable."" Where, without consideration, a bank receives from a 
money lender a sum to be delivered to one of his customers, on 
a check to be drawn by the customer, and the bank pays the money 
on a check received at the time and under the circumstances as 
agreed, and in the due course of business, the bank is merely a 
gratuitous bailee for the benefit of the bailor, and is not liable 
for the amount of the money because such check was a forgery, 
if good faith and ordinary diligence were used by it."*^ 

§ 3021. Termination of relation and redelivery. — The gen- 
eral rules of bailments relating to the termination of the relation 

"Foster v. Essex Bank, 17 Mass. "Gray v. Merriam, 148 111. 179, 35 

479 9 Am. Dec. 168; Smith v. First N. E. 810, 32 L. R. A. 769, 39 Am. 

Nat Bank 99 Mass. 60S; First Nat. St. 172; L'HerbeUe v. Pittsfield Nat. 

Bank v. Ocean Nat. Bank, 60 N. Y. Bank, 162 Mass. 137, 38 N. E. 368, 

278 19 Am Rep 181 ; Scott v. Bank 44 Am. St. 3S4 ; First Nat. Bank v. 

of 'Chester Valley, 72 Pa. St. 471. Rex, 89 Pa. St. 308, 33 Am. Rep. 767; 

Special deposits, whether of money, Preston v. Prather, 137 U. S. 604, 34 

bonds, stocks, or other securities, are L. ed. 788, 11 Sup. Ct. 162. 

imposed with such conditions, usual "Foster v. Essex Bank, 17 Mass. 

or unusual, as are dictated by the 479, 9 Am. Dec 168. 

depositor and accepted by the depos- Gerrish v. Muskegon Sav. Bank, 

itary Van Waggoner v. Buckley, 138 Mich. 46, 100 N. W. 1000, 4 Ann. 

133 N Y S 599 A bank is liable Cas. 1083 and note. See also, Louis- 

for loss of ' diamonds received on villa &c. R. Co v Buffington 131 Ala. 

special deposit through gross negli- 620 31 So 592 ; Carlyon v. Fitzhenry, 

gence of employes. First Nat. Bank 2 Ariz. 266, 15 Pac. 273. 

V Tevis 29 Okla. 714, 119 Pac. 218. 'Armour v. Greene County State 
"Foster v Essex Bank, 17 Mass. Bank, 112 Fed. 631, SO C. C. A. 399; 

479 9 Am Dec 168. See cases cited Cannon River Mfgrs.' Assn. v. First 

above and Chattahoochee Nat. Bank Nat. Bank, 37 Minn. 394, 34 N. W. 

V Schley 58 Ga. 369; First Nat. 741; People's Nat. Bank of King- 
Bank v Graham, 79 Pa. St. 106, 21 fisher v. Wheeler, 21 Okla. 387, 96 
Am Rep 49 Pac. 619, 21 L, R. A. (N. S.) 816n. 



§ 3°^^ BAILMENTS. 268 

and redelivery apply equally to bailments of the class just con- 
sidered. As to the redelivery, or delivery over, the terms of the 
bailment are ordinarily controlling.*" A stakeholder usually must 
exercise some discretion or responsibility to ascertain to whom 
delivery should be made.*' The bailor may, of course, terminate 
the bailment at will, and a depositary without hire may terminate 
the bailment at pleasure, upon giving reasonable notice to the 
owner, unless he has contracted to keep the goods for a fixed 
time.*^ A gratuitous bailee must redeliver to the proper person, 
at peril of being held for a conversion. ■"" 

§ 3022. For benefit of the bailee — Gratuitous loans — The 
commodate. — Where property is loaned gratuitously by 
the owner for the sole benefit, accommodation and use of the 
borrower, and the specific thing loaned is to be returned, a gratu- 
itous bailment relation is created, which may be called a com- 
modate, from the Roman commodatum, a similar relation. °'' Our 
English loan includes also the loan of money for reward, and the 
loan of goods to be returned in kind, neither of which is a bail- 
ment. The distinction between the commodate and other bail- 
ments lies in the fact that there is no benefit of any kind, directly 
or indirectly, to the bailor, but the benefit is solely to the bailee, for 
if there were mutual benefit, however slight, the bailment would 
become one of a different class, in which the liabilities are very 
different. Since the general rule in bailments is that the liability 
of the bailee is proportionate to the benefit he receives, it follows 
that the bailee in commodate is held to a very high degree of care 
for the thing loaned, and this feature distinguishes his legal lia- 
bility from that of other bailees. 

"Story Bailments (9th ed.), §§ 117, Wend. (N. Y.) 25, 25 Am. Dec. 596; 

118; Roulston v. McClelland, 2 E. D. Roulston v. McClelland, 2 E. D. 

Smith (N. Y.) 60; Bliven v. Hudson Smith (N. Y.) 60; Goodwin v. Ray, 

R. Co., 36 N. Y. 403 ; Burton v, Wil- 108 Tenn. 614, 69 S. W. 730, 91 Am. 

kinson, 18 Vt. 186, 46 Am. Dec. 145. St. 761. 

"Trefftz V. Canelli, L. R. 4 P. C. "Wear v. Gleason, 52 Ark. 364, 12 

277; Carle v. Bearce, 33 Maine 337; S. W. 756, 20 Am. St. 186. 

State V. Fitzpatrick, 64 Mo. 185. "See Schouler Bailments (3d ed.), 

*' Hale Bailments, pp. 74, 75 : Wink- § 66 ; Street, Found. Leg. Liab., vol. 

ley V. Foye, 33 N. H. 171, 66 Am. Dec. 2, ch. 28, p. 281. 
715; Beardslee v. Richardson, 11 



269 GRATUITOUS BAILMENTS. § 3O23 

§ 3023. Creation of the relation. — This relation can only 
arise by contract, for only by the owner's consent can one acquire 
the right to use another's property for his own benefit/^ There- 
fore the parties must be competent, and fraud or duress will 
vitiate the contract, as in the case of any other contract."^ Nor 
can an executory contract for a loan be enforced, since the con- 
sideration for the bailment does not arise until the delivery of the 
property loaned. °^ If the contract is not for a legal purpose the 
law will not recognize it.^* The relationship begins with the 
delivery of the article loaned to the borrower, and there is no lia- 
bility upon either party before." 

§ 3024. Bailee's rights and obligations. — The bailee of this 
class, has, like all other bailees, a possessory right which he can 
legally defend against third parties.^" His right to use the article 
loaned depends entirely upon the conditions of his contract, and 
any deviation in the slightest degree therefrom is a tort, and 
renders him strictly liable for any resulting injury, even though 
it was caused by the act of God, or the public enemy, or irresisti- 
ble force, and though this rule can be said to apply to every bailee, 
it is construed much more strictly in the case of the bailee in a 
commodate relation." So the bailee, having the use of the ar- 
ticle, must pay all ordinary expenses connected with its use, as 

"Hagebush v. Ragland, 78 111. 40; Barker v. Miller, 6 Johns. (N. Y.) 

State V. Bryant, 74 N. Car. 124. 195; cases cited Hale Bailments, p. 

"'Hagebush v. Ragland, 78 111. 40; 90. 

Eaton V. Hill, SO N. H. 235, 9 Am. "Van Zile Bailments (2d ed.). 

Rep. 189 ; Campbell v. Stakes, 2 § 105 ; Coggs v. Bernard, 2 Ld. Raym. 

Wend. (N. Y.) 137, 19 Am. Dec. 561; 909; Bringloe v. Morrice, 1 Mod. 

Vasse V. Smith, 6 Cranch (U. S.) 210; Bryant v. Wardell, 2 Exch. 479; 

226, 3 L. ed. 207. Stewart v. Davis, 31 Ark. 518, 25 Am. 

•^'Elsee V. Gatward, 5 T. R. 143; Rep. 576; Ross v. Southern Cotton 

Shillibeer v. Glyn, 2 M. & W. 143; Oil Co., 41 Fed. 152; Wilcox v. 

Thorne v. Deas, 4 Johns. (N. Y.) 84; Hogan, 5 Ind. 546; Cullen v. Lord, 

Crosby v. German, 4 Wis. 373. 39 Iowa 302; Green v. Hollings- 

" Story Bailments, § 229; Van Zile worth, 5 Dana (Ky.) 173, 30 Am. 

Bailments (2d ed.), § 103. Dec. 680; Wheelock v. Wheelwright, 5 

"'Schouler Bailments (3d ed.), Mass. 104; Beller v. Schultz, 44 Mich. 

§ 71. 529, 7 N. W. 225, 38 Am. Rep. 280; 

™ Chamberlain v. West, il Minn. Scranton v. Baxter, 4 Sandf. (N. Y.) 

54 3 N W 114; Paddock v. Wing, 5; Collins v. Bennett, 46 N. Y. 490; 

16 How. Pr. (N, Y.) 547: Hurd v. Fox v. Pruden, 3 Daly (N. Y.) 187; 

West 7 Cow N. Y.) 752; Hendricks Hart v. Skinner, 16 Vt. 138, 42 Am. 

V. D'ecker, 35 Barb. (N. Y.) 298; Dec. 500. 



§ 3025 BAILMENTS. 



270 



for feed, care and shoes for a horse?' But he is not liable for 
extraordinary expenses not incident to the use and not caused by 
his fault, as, for instance, if a horse should be taken so sick that a 
veterinary was necessarily employed, the bailor would be liable 
for expenses so incurred, and the bailee could recover from the 
bailor if he had paid them/" One to whom photographs are 
loaned for a particular purpose has no right, in the absence of 
express or implied authority, to use them for any otherj^" and 
where a photograph was loaned to a painter to aid him in paint- 
ing a portrait, and he painted a second portrait from it, it was a 
violation of the contract, and a breach of the trust reposed in the 
painter under the contract relation existing with the owner/^ A 
vendor of chattels who undertakes to ship them to a consignee 
is liable for their value in case they are lost through his failure 
to see that they reach the carrier."^ 

§ 3025. Bailor's rights and duties. — The bailor must gen- 
erally warn the bailee of any known defects in the thing lent, but 
is not liable for injuries caused by defects of which he did not 
know/'' He must reimburse the bailee for extraordinary expenses 
incurred in the preservation of the chattel, not caused by the 
bailee's fault."* And it seems that if the bailment is for a fixed 
term he must allow the bailee to use the thing loaned until the ex- 
piration of that term, at least if termination of the loan before that 
time would injure the bailee,"' though some authorities regard 

■^'Bennett v. O'Brien, Z1 111. 2S0; 679 and note. See Coggs v. Bernard, 

Harrington v. Snyder, 3 Barb. (N. 2 Ld. Raym. 909, 1 Smith Lead. Cas. 

Y.) 380. (9th Am. ed.) 354 and notes; Clark 

™ Chase v. Corcoran, 106 Mass. v. Hutchins, 14 East. 475; Dickey v. 
286; Starrett v. Barber, 20 Maine Grant, 6 Cow. (N. Y.) 310; Diebold 
457; Dale v. Brinkerhoff, 7 Daly (N. Safe & Lock Co. v. Holt, 4 Okla, 
Y.) 45; Harter v. Blanchard, 64 479, 46 Pac. 512; McCandlish v. New- 
Barb. (N. Y.) 617; Blake v. Buch- man, 22 Pa. St. 460. 
anan, 22 Vt. 548. °' Blakemore v. Bristol &c. R. Co., 

""Tuck V. Priester, 19 Q. B. Div. 8 El. & Bl. 1035; Coughlin v. Gillison 

629; Corliss v. E. W. Walker Co., 57 (1899), 1 Q. B. 145; MacCarthy v. 

Fed. 434, 64 Fed. 280, 31 L. R. A. Young, 6 H. & N. 329; Gagnon v. 

283; Klug v. Sheriffs, 129 Wis. 468, Dana, 69 N. H. 264, 39 Atl. 982, 41 

109 N. W. 656, 9 Am. & Eng. Ann. L. R. A. 389, 76 Am, St. 170. 

Cas. 1013, and note. "See cases cited under note 59. 

«Klug V. Sheriffs, 129 Wis. 468, "^Hale Bailments, p. 97, citing 

109 N. W. 656, 9 Am. & Eng. Ann. Bringloe v. Morrice, 1 Mod. 210; 

Cas. 1013. Root v. Chandler, 10 Wend. (N. Y.) 

"'Sprinkle v. Brim, 144 N. Car. 401, 110; Hoyt v. Gelston, 13 Johns. (N. 

57 S. E. 148, 12 L. R. A. (N. S.) Y.) 141, affd., 13 Johns. (N. Y.) 



271 GRATUITOUS BAILMENTS. § 3O26 

such a bailment as entirely precarious, and terminable at any time 
by the bailor f^ and in any event in the absence of stipulation, the 
bailor may terminate the bailment after a reasonable period of 
time.**^ He may sue third parties in his own name for injuries, 
while the article is in the possession of the bailee."* 

§ 3026. The care demanded of the bailee. — The bailee is 
held to the strictest care of the property and is answerable for 
damages resulting from the slightest neglect,*" and is held with 
the same strictness to follow the directions of the owner and 
the conditions of the loan." It has sometimes been said that he 
is bound to use more care than he used for his own goods, but 
this is not a fair test, the real test being whether he was guilty 
of any negligence.'^ Since he is liable for only slight negligence, 
it would seem that he is held to use the degree of care which men 
of more than ordinary prudence use in the care of their own 
goods in similar circumstances.'^ On the other hand, if the 
lender knows from the borrower's character, habits or skill, that 
he is not capable of bestowing the care of a more than ordinarily 
prudent man, he has loaned the article with this in mind, and 
cannot hold the borrower to greater care than he is capable of, 
as where a horse is lent to an inexperienced boy, the lender can- 
not expect him to exercise the care of a skilled horseman.'^ If 
the borrower has not departed from his contract, or has not been 
negligent, he is not liable for acts caused by the act of God, the 

561; Schouler Bailments (3d ed.), § 102; Acyzynski v. Bulkiewicz, 140 

§ 87; Story Bailments (9th ed.), III. App. 375. 

§§258,261. '"See cases cited under note 57, 

"See Schouler Bailments (3d ed.), § 3024. 

§ 81; Story Bailments (9th ed.), '" Schouler Bailments (3d ed.), 

§ 277. § 75; Story Bailments (9th ed.), 

"Green v. Hollingsworth, 5 Dana §§ 245-251; Hale Bailments, pp. 94- 

(Ky.) 173, 30 Am. Dec. 680; Clapp 95. 

V. Nelson, 12 Tex. 370, 62 Am. Dec. "Story Bailments (9th ed.), § 238; 

530. Schouler Bailments (3d ed.), § 72; 

"•Qaridge v. South Staffordshire Vaughan v. Menlove, 3 Bing. N. C. 

Tramway Co. (1892), 1 Q. B. 422; 468; Seller v. Schultz, 44 Mich. 529, 

Orser v. Storms, 9 Cow. (N. Y.) 687, 7 N. W. 225, 38 Am. Rep. 280. 

18 Am. Dec. 543. See cases cited "Beale v. South Devon R. Co., 12 

above. W. R. 1115; Wilson v. Brett, 11 M. 

™ Street, Found. Leg. Liab., vol. & W. 113; Knowles v. Atlantic & 

2, ch. 28, p. 281; Schouler Bailments St. L. R. Co., 38 Maine 55, 61 Am. 

(3d ed.), § 72; Story Bailments (9th Dec. 234; Mooers v. Larry, IS Gray 

ed.), § 237; Van Zile Bailments, (Mass.) 451; Eastman v. Patterson, 

38 Vt. 146. 



§ 3027 BAILMENTS. 272 

public enemy, irresistible force, or inevitable accident, nor for the 
acts of a robber, thief or mere stranger.'* He must at all times 
exercise perfect good faith, a duty devolving upon all bailees. 
For damage caused by ordinary wear or tear he is not liable.'^ 

§ 3027. Redelivery. — The bailee must return the thing 
borrowed, and everything accessorial, as the young of an animal, 
born during the time of the bailment, and the income of stock 
loaned to allow the borrower to pledge it as security.'" He must 
return it at the time specified, or he is liable in an action for 
breach of contract," or, if no time was fixed, within a reasonable 
time.'* The contract will ordinarily govern as to the place of de- 
livery; if not, the proper place is to be determined from the cir- 
cumstances."* In general, delivery must be made to the lender, 
but if the bailee restores it to the true owner, or the true owner 
takes it from his possession, this relieves him from liability to the 
lender.*" The borrower cannot retain the article borrowed as se- 
curity for any antecedent debt owing to him. That would be a 
departure from the contract obligations, and, indeed, an exercise 
of bad faith on the part of the bailee.*^ 

"Abraham v. Nunn, 42 Ala. 51; 187; Clapp v. Nelson, 12 Tex. 370, 

Bennett v. O'Brien, Zl 111. 250 ; Wood 62 Am. Dec. 530. 

V. McClure, 7 Ind. 155; Watkins v. "Lay's Exr. v. Lawson's Admr., 23 

Roberts, 28 Ind. 167; Yale v. Oliver, Ala. 2,11; Wilcox v. Hogan, 5 Ind. 

21 La. Ann. 454; Seller v. Schultz, 546; Green v. HoUingsworth, 5 Dana 

44 Mich. 529, 7 N. W. 225, 38 Am. (Ky.) 173, 30 Am. Dec. 680; Ross v. 

Rep. 280; Scranton v. Baxter, 4 Clark, 27 Mo. 549. 

Sandf. (N. Y.) 5; Fortune v. Harris, "Hale Bailments, § 23, p. 99. 

6 Jones (N. Car.) 532. "Hale Bailments, § 23, p. 100; 

"Hyland v. Paul, il Barb. (N. Y.) Shelbury v. Scotsford, Yel. 23; Wat- 

241. See cases cited in note 74. kins v. Roberts, 28 Ind. 167 ; Whit- 

" Booth V. Terrell, 16 Ga. 20 ; Allen tier v. Smith, 11 Mass. 211; The 

V. Delano, 55 Maine 113, 92 Am. Dec. "Idaho," 93 U. S. 575, 23 L. ed. 978. 

hll; Orser v. Storms, 9 Cow. ( N. "^ Story Bailments (9th ed.), § 262; 

Y.) 687, 18 Am. Dec. 543; Hasbrouck Pick v. Runnels, 48 Mich. 302, 12 N. 

V. Vandervoort, 4 Sandf. (N. Y.) W, 204; Enos v. Cole, S3 Wis. 235, 

74. 10 N. W. 2,11. 

"Fox V. Pruden, 3 Daly (N. Y.) 



CHAPTER LXX. 



PLEDGES. 



§ 3030. What is a pledge. 

3031. Pledge distinguished from 

chattel mortgage and lien. 

3032. Essentials of the relation. 

3033. What debt may be secured. 

3034. What may be pledged. 

3035. Title necessary to pledge 

goods. 

3036. Delivery in pledge. 

3037. Constructive delivery. 

3038. Certain kinds of constructive 

delivery not good as to 
creditors. 

3039. Delivery of negotiable instru- 

ments in pledge. 

3040. Pledge of corporate stock. 

3041. DeHvery of bills of lading, 

and other quasi-negotiable 
papers. 

3042. Pledgee's right to possession 

of pledge. 

3043. Pledgee's right to use — Ex- 

penses and profits. 

3044. Care demanded of pledgee — 

Collection of negotiable pa- 
per. 

3045. Pledgee's right to assign 

pledge. 

3046. Conversion by pledgee. 

3047. The pledgor's warranty of 

title to the pledge. 



? 3048. 

3049. 

3050. 

3051. 

3052. 

3053. 
3054. 

3055. 
3056. 

3057. 
3058. 
3059. 

3060. 



3061. 
3062. 



Pledgor's right to assign sub- 
ject to pledge. 

Pledgor's right to sue third 
parties. 

The pledgor's right to re- 
deem. 

Termination of the relation by 
the pledgor. 

Termination by consent of 
parties or operation of law. 

Redelivery. 

Pledgee's remedies upon 
pledgor's default. 

Suit on the debt. 

Common law sale of the 
pledge. 

Sale in equity. 

Sale under statute. 

Sale under the provisions of 
a special contract. 

Further of pledgee's rights 
in case of default — Where 
pledge is chose in action or 
corporate stock. 

Pledgor's rights in case of 
default, or in case of 
pledgee's wrong. 

Rights of purchaser at 
pledgee's sale. 



§ 3030. What is a pledge. — With the subject of pledges 
we pass to bailments of mutual benefit. A pledge is a bailment of 
a chattel to secure the payment of a debt, or the performance of 
an obligation, with power of sale in case of a default.^ This re- 
lationship probably had its origin in the business of the pawn- 
broker, who made loans upon jewelry and wearing apparel as 
security, but in the modern business world the relationship has 

^ See Jones Pledges, 1 ; Hale Bail- W. Va. 156, 24 S. E. 548, 32 L. R. A. 
ments, § 25; Goddard Bailment/i, § 408. 
70; First Nat. Bank v. Harknes^ 42 



273 



18 — Contracts, Vol. 4 



5 3031 BAILMENTS. 274 

expanded, and now the pledgee is perhaps more often a banking 
corporation which makes loans on collateral security, a loan and 
security corporation, or a collateral security bank, carrying on 
transactions amounting to millions of dollars, so that the law of 
pledges is one of the most important branches of the modern 
law of contracts, and, excepting carriers, the subject is the most 
extensive in its application of the bailment subjects. The rela- 
tion is essentially a contract relation ; therefore the ordinary rules 
of contracts as to the competency of parties, the consideration, 
mutual assent, and construction of contracts apply, while the 
principles of agency as well are applicable. 

§ 3031. Pledge distinguished from chattel mortgage and 
lien. — The holder of a lien on personal goods has the right to 
retain the goods until the debt is paid, but has no right to sell 
them, and as a rule cannot transfer his lien, it being personal.^ 
The holder of goods in pledge has not only the right to retain 
them until the obligation is met, but may sell them in case of de- 
fault, and ordinarily may transfer his right. ^ The holder of a 
chattel mortgage holds the legal title to the goods, subject to de- 
feat by the payment of the debt or obligation, and thus has a 
greater right than the pledgee, while the lienholder has a lesser 
right. And as the mortgagee holds by transfer of title, it is not 
essential to the maintenance of his rights that he should have 
possession of the goods, while the pledgee's rights depend upon 
possession.* Apparently absolute transfers of property may be 
shown to have been intended by the parties as merely pledges for 
security, and in construing such contracts the courts are governed 
largely by the intention of the parties, so that "whether one is 
a purchaser or pledgee depends upon the true intent of the trans- 
action."^ 

^ Hale Bailments, p. 103; Schouler 'See citations in note 3, supra. For 

Bailments, Including Carriers (1905), distinction between chattel mortgage 

§ 139; Goddard Bailments, § 72; Mc- and pledge, see American Pig Iron 

Combie v. Davies, 7 East 5 ; Potho- &c. Co. v. German, 126 Ala. 194, 28 

nier v. Dawson, Holt N. P. 383. See So. 603, 85 Am. St. 21 note, 4 L. R. 

note 94 Am. St, 240. A. 305. See Conrad v. Fisher, 37 Mo. 

"See infra, §§ 3045, 3056-3060; 1 App. 352, 8 L. R. A. 147. 

Powell Mortgages 3 ; Hale Bailments, ° Schouler Bailments Including Car- 

p. 103; Schouler Bailments (3d ed.), riers (1905), § 140. See also, 

§§ 167, 168. Wright v. Ross, 36 Cal. 414; Com- 



275 



PLEDGES. 



§ 3032 



§ 3032. Essentials of the relation. — It is essential, in addi- 
tion to the elements common to all bailments, that there should 
be a mutual agreement of the parties — for a pledge cannot be cre- 
ated by operation of law, though it may be implied. from the 
conduct of the parties® — and that there be a debt or obligation to 
be secured. 

§ 3033. What debt may be secured. — ^The debt secured 
may be that of the pledgor, or of some other person, if there is 
assent by all parties.' Either a future' or a past^ obligation may 
be secured ; or many debts and not one only ;^'' and the security 
may be absolute, or conditional, for a limited or an indefinite 
time." The parties may have an agreement by which the subject 
of the pledge may become security for debts which may arise be- 
tween them from time to time.^^ But when a pledge has been 



stock V. Smith, 23 Maine 202; Wil- 
kie V. Day, 141 Mass. 68, 6 N. E. 542 ; 
Partee v. Bedford, 51 Miss. 84; Har- 
ris & Co. V. Lombard, 60 Miss. 29; 
Wood V. Matthews, n Mo. 477 ; Wil- 
son V. Little, 2 N. Y. 443, 51 Am. Dec. 
307n; McCoy v. Lassiter, 95 N. Car. 
88; British Columbia Bank v. Mar- 
shall, 8 Sawyer (U. S.) 29. If there is 
doubt as to whether a transaction is 
a pledge or chattel mortgage, the 
law favors the conclusion that it is a 
pledge. Palmer v. Mutual Life Ins. 
Co., 114 Minn. 1, 130 N. W. 250, 
Ann. Cas. 1912B. 957, and see note 
for distinction between pledge and 
chattel mortgage. 

"Hale Bailments, § 26; Schouler 
Bailments (3d ed.), § 179; Wilkinson 
V. Misner, 158 Mo. App. 551, 138 S. 
W. 931; Means v. Bank of Randall, 
146 U. S. 620, 13 Sup. Ct. 186, 36 L. 
ed. 1107. 

' Price V. Dime Savings Bank, 124 
111. 317, 15 N. E. 754, 7 Am. St. 367; 
Britton v. Harvey, 47 La. Ann. 259, 
16 So. 747; Jewett v. Warren, 12 
Mass. 300, 7 Am. Dec. 74. 

'Merchants' Nat. Bank v. Demere, 
92 Ga. 735, 19 S. E. 38; Clymer v. 
Paterson, 52 N. J. Eq. 188, 27 Atl. 
645; Merchants Nat. Bank v. Hall, 
83 N. Y. 338, 38 Am. Rep. 434; 
Stearns v. Marsh, 4 Denio (N. Y.) 
227, 47 Am. Dec. 248; Leonard v. 



Kebler's Admr., SO Ohio St. 444, 34 
N. E. 659. 

•Jewett V. Warren, 12 Mass. 300, 
7 Am. Dec. 74; Badlam v. Tucker, 1 
Pick. (Mass.) 389, 11 Am. Dec. 202; 
Stearns v. Marsh, 4 Denio (N. Y.) 
227, 47 Am. Dec. 248 ; Conard v. At- 
lantic Ins. Co., 1 Pet. (U. S.) 386, 7 
L. ed. 189; D'Wolf v. Harris, 4 
Alas. (U. S.) 515, Fed. Cas. No. 
4221, affd. 4 Pet. (U. S.) 147, 7 L. 
ed. 811. An existing overdue note is 
sufficient consideration for the pledge 
of stock as security for its payment. 
State Banking & Trust Co. v. Tay- 
lor, 25 S. Dak. 577, 127 N. W. 590, 
29 L. R. A. (N. S.) 523. 

"Mechanics' &c. Bank v. Living- 
ston, 6 Misc. (N. Y.) 81, 55 
N. Y. St. 394, 26 N. Y. S. 
25; Jones v. Merchants' Nat. Bank, 
72 Hun (N. Y.) 344, 25 N. Y. S. 
660, 55 N. Y. St. 365. 

"Stevens v. Bell, 6 Mass. 339; 
. Hendricks v. Robinson, 2 Johns. Ch. 
(N. Y.) 283; Shirras v. Craig, 7 
Cranch (U. S.) 34, 3 L. ed. 260. 

"Norton v. Plumb, 14 Conn. 512; 
Hallowell v. Blackstone Nat. Bank, 
154 Mass. 359, 28 N. E. 281, 13 L. R. 
A. 315 ; Fall River Bank v. Slade, 153 
Mass. 415, 26 N. E. 843, 12 L. R. A. 
131n; Merchants Nat. Bank v. Hall, 
83 N. Y. 338, 38 Am. Rep. 434. 



§ 3034 



BAILMENTS. 



276 



made to secure one debt, the pledgee is not authorized to detain 
the property to secure a former debt/^ or a subsequent debt/* un- 
less the parties so intended. Even if the debt is void because of 
illegality of consideration, the pledge may be good, for though 
the pledgee cannot recover on the debt, he can retain the pledge 
until it is redeemed, and the pledgor cannot recover possession 
without redeeming, for to do so he must set up his own wrong," 
and likewise the pledgee cannot set up the illegal contract to pre- 
vent redemption.^* 

§ 3034. What may be pledged. — Corporeal personal prop- 
erty may be pledged.^' Almost any form of incorporeal property 
and choses in action may also be pledged, including bills and 
notes,^* coupon bonds and government securities,^' municipal 
claim vouchers,'"' shares of stock,^^ chattel mortgages of every 
kind,^^ title-deeds,"^ a savings-bank deposit,"* judgments,"^ bonds 
secured with a mortgage on personal property and corporate 
franchises,^* the gross receipts of a railway corporation,"' even 



^Mahoney v. Caperton, IS Cal. 
313; Russell v. Hadduck, 8 111. 233, 
44 Am. Dec. 693; Jarvis v. Rogers, 
15 Mass. 389; Robinson v. Frost, 14 
Barb, (N. Y.) S36; Philler v. Jewett, 
166 Pa. St. 456, 31 Atl. 204; Bank of 
Metropolis v. New England Bank, 1 
How. (U. S.) 234, 11 L. ed, 115. 

"Midland Co. v. Huchberger, 46 
111. App. 518; Baldwin v. Bradley, 69 
111. 32; Gilliat V. Lynch, 2 Leigh 
(Va.) 493. 

'= Taylor v. Chester, L. R. 4 Q. B. 
309; King v. Green, 6 Allen (Mass.) 
139. It is held that a pledge to se- 
cure a gambling debt is void, in 
jMenard v. Wacker,. i2 Nev. 169, 105 
Pac. 287, Ann. Cas. 1912C. 710. 

"Jones Pledges, § 354; King v. 
Green, 6 Allen (Mass.) 139. 

"Schouler Bailments (3d ed.), § 
172. The rails and rolling stock of a 
railway laid for a temporary pur- 
pose on another's ground, being per- 
sonal property, may be pledged. 
Woodward v. American Exposition 
R. Co., 39 La. Ann. 566. 2 So. 413. 

"Smithurst v. Edmunds, 14 N. J. 
Eq. 408; Stearns v. Marsh, 4 Denio 
(N, Y,) 227, 47 Am. Dec, 248; Hou- 
ser V. Kemp, 3 Pa. St. 208. 



"Loomis V. Stave, 72 111. 623; Mor- 
ris Canal Co. v. Lewis, 12 N, J. Eq. 
323; Strong v. Nat. Bank Assn., 45 
N. Y. 718; Texas Banking Co. v. 
Turnley, 61 Tex. 365, 

'^ Talty V, Freedman's Savings 
Trust Co,, 93 U. S, 321, 23 L. ed. 886. 

^Halliday v. Holgate, L. R, 3 Ex, 
299; Worthington v, Tormey, 34 Md, 
182; Pinkerton v. Manchester & L. 
R. R,, 42 N. H, 424; Conyngham's 
Appeal, 57 Pa, St. 474; Stone v. 
Brown, 54 Tex. 330 ; Heath v. Silver- 
thorn Lead Mining & Smelting Co., 
39 Wis. 146. 

"^ Jerome v. McCarter, 94 U. S. 734, 
24 L. ed. 136; Fraker v. Reeve, 36 
Wis. 85. 

"" In re Kerr, L. R, 8 Eq, 331 ; Eng- 
lish v, McElroy, 62 Ga, 413. 

^■"Boynton v. Payrow, 67 Maine 
587 

'"Hanna v. Holton, 78 Pa. St. 334, 
21 Am, Rep, 20, 

""White Mountains R, v. Bay State 
Iron Co., 50 N, H, 57; Potter v. 
Thompson, 10 R. I, 1, 

"West Maryland R. Co, v. Blue 
Ridge Hotel Co., 102 Md. 307, 62 Atl. 
351, 111 Am, St. 362. 



^77 PLEDGES. § 3035 

a lease, regarded as a chattel real/' or a mortgage of real estate, 
which before foreclosure is personal property,^" a life insurance 
policy,"" a policy of fire or marine insurance.""^ So an interest 
in a limited partnership may be pledged,"'' or by written assign- 
ment a book account"" or some claim or demand,"* bills of lad- 
ing,"° and warehouse receipts."" What is not in existence cannot 
be the subject of a pledge, whether it has ceased to exist, or has 
not come into being,"^ and yet there may be a contract to pledge 
the product in future of something to which one holds a present 
right, like the prospective earnings of a contract, a crop severed 
from land, milk from cows, wool from sheep, or goods to be 
manufactured, and when the property comes into existence, and 
the pledgee takes possession, the pledge is consummated."" Prop- 
erty exempt from execution may be pledged."" By statute, the 
pledge of the pay of soldiers*" and United States pensions" is 
forbidden. 

§ 3035. Title necessary to pledge goods. — The pledgor 
need not be the absolute owner of the goods pledged.*'' The 
holder of a limited interest, as the owner of a life interest,*" or 
a pledgee** may pledge what interest he has, and in case of de- 

^ Dewey v. Bowman, 8 Cal. 145. * Cleveland v. Shoeraan, 40 Ohio 

"" Campbell v. Parker, 9 Bosw. (N. St. 176. 

Y.) 322; Jerome v. McCarter, 94 U. " Schouler Bailments (3d ed.), §§ 

S. 734, 24 L. ed. 136; Wells v. Wells, 174, 175. 

S3 Vt. 1. ""Schouler Bailments (3d ed.). I 

""West V. Carolina Life Ins. Co., 175; Goddard Bailments, § 74. 

31 Ark. 476; Soule v. Union Bank, "Jones v. Scott, 10 Kans. ZT,; Frost 

45 Barb. (N. Y.) Ill; Hakes v. My- v. Shaw, 3 Ohio St. 270. 

rick, 69 Iowa 189, 28 N. W. 575. *> U. S. Comp. Stat., 1901, § 1291. 

''Latham v. Chartered Bank of *U. S. Comp. Stat., 1901, § 4745. 

India, L. R. 17 Eq. 205 ; Merrifield *" See note, 3 Am. St. 204. A part- 

V. Baker, 9 Allen (Mass.) 29. ner may not pledge partnership prop- 

"■ Collin's Appeal, 107 Pa. St. 590, erty for his individual debts. Oli- 

52 Am. Rep. 479. phant v. Markham, 79 Tex. 543, 15 

=" Works V. Merritt, 105 Cal. 467, 38 S. W. 569, 23 Am. St. 363. And a 

Pac. 1109. joint owner in possession, though he 

" Taylor v. Turner, 87 111. 296 ; may pledge his own interest, may not 

Hathaway v. Haynes, 124 Mass. 311; pledge that of his co-owner, without 

Commonwealth v. Suffolk Trust Co., the latter's consent. Frans v. Young, 

161 Mass. 550, 37 N. E. 757; Marine 24 Iowa 375. 

Bank V. Fiske, 71 N. Y. 353. "Hoare v. Parker, 2 T. R. 376. 

°'Lickbarrow v. Mason, 1 H. BI. "McCombie v. Davies, 7 East 5; 

357; Douglas v. People's Bank, 86 Jarvis v. Rogers, 15 Mass. 389; Lewis 

Ky. 176, 5 S. W. 420, 9 Am. St. 276; v. Mott, 36 N. Y. 395; Nat. Bank of 

Neill V. Rogers Bros.' Produce Co., Pulaski v. Winston, S Baxt. (Tenn.) 

41 W. Va. 37, 23 S. E. 702. 685. 



§ 303S BAILMENTS. 2/8 

fault, the pledgee may sell such interest, though he cannot sell 
the absolute property, and destroy the rights of the true owner.*' 
At common law, a lienholder cannot make a valid pledge of the 
property on which he holds a lien, for such is a personal right, 
and cannot be assigned." So a factor, though the holder of a 
lien for advances, has not the right at common law to pledge his 
principal's goods,*^ yet by statute in some states both the factor 
and the ordinary lienholder have been given the right to pledge 
goods.''* So it has been held that the owner of goods who 
clothes another with the indicia of ownership cannot take them 
from a bona fide pledgee without notice,*'' as where the vendee 
of a conditional sale has pledged goods.^" If goods obtained 
from the owner by fraud are pledged, the pledgee can enforce 
his rights as against the owner," but if stolen goods are pledged, 
the pledgee has no rights against the owner.^^ In the first case, 
though the owner's consent was obtained by fraud, yet he con- 
sented to the passing of the goods from his possession, while 
in the second he has in no manner consented. The pledge of a 
negotiable instrument not overdue gives to the bona fide pledgee 

■'"Jones Pledges, § 60; Robertson *'Babcock v. Lawson, 4 Q. B. Div. 

V. Wilcox, 36 Conn. 426. 394; Morsch v. Lessig, 45 Colo. 168, 

" McCombie v. Davies, 7 East S. 100 Pac. 431 ; Branson v. Heckler, 22 

"Hale Bailments, p. 114, and cases Kans. 610; Agnew v. Johnson, 22 Pa. 

cited; Bott v. McCoy, 20 Ala. 578, 56 St. 471, 62 Am. Dec. 303; Reynolds 

Am. Dec. 223 ; Gray v. Agnew, 95 111. v. \\'itte, 13 S. Car. 5, 36 Am. Rep. 

31S; Hoffman v. Noble, 6 Mete. 678; Calais Steamboat Co. v. Scudder, 

(Mass.) 68, 39 Am. Dec. 711; Ken- 2 Black (U. S.) 372, 17 L. ed. 282. 

nedy v. Strong, 14 Johns. (N. Y.) "Michigan C. R. Co. v. Phillips, 

128; McCreary v. Gaines, 55 Tex. 485, 60 111. 190; Western Union R. Co. v. 

40 Am. Rep. 818; Warner v. Martin, Wagner, 65 111. 197. 

11 How. (U. S.) 209, 13 L. ed. 667; '^'Duell v. Cudlipp, 1 Hilt. (N. Y.) 

note 45 Am. St. 204. 166; Hoffman v. Carow, 22 Wend. 

*' Ordinary Lienholders, Civ. Code (N. Y.) 285. 

Cal. (1906), § 2990; Civ. Code Dak. "nA'hite v. Garden, 10 C. B, 919; 

(1883), § 1761; Louisiana Laws 1874, Parker v. Patrick, 5 T. R. 175; Wood 

No. 66; Maryland Pub. Gen. Laws v. Yeatman, 15 B. Mon. (Ky.) 270; 

(1904), pp. 204-205, §§ 1-5; Massa- Caldwell v. Bartlett, 3 Duer (N. Y.) 

chusetts Rev. Stat. (1902), ch. 68; 341; Mowrey v. Walsh, 8 Cow. (N. 

Factors, New York, 3 Rev. Stat., Y.) 238; Farmers' Bank v. Diebold 

(1901), p. 4020, § 72; Ohio Rev. Stat. Safe & Lock Co., 66 Ohio St. 367, 64 

(1905), §§ 5142-48; Pennsylvania, N. E. 518, 58 L. R. A. 620, 90 Am. St. 

Brightley's Purdon's Dig. (1873), p. 586; Arendale v. Morgan, 5 Sneed 

664; Rhode Island Gen. Laws (1909), (Tenn.) 703. See Menard v. Wac- 

p, 612, ch, 187; Wisconsin Rev. Stat., ker, 32 Nev. 169, 105 Pac. 287, Ann. 

(1898), §« 3345-3347. See Weiner v. Cas. 1912C. 710, as to pledge by 

Harris (1910), 1 K. B. 285, 18 Am. clerk of an employer's money with- 

& Eng. Ann. (Tas. 87. out employer's knowledge. 



279 PLEDGES. § 3036 

without notice full rights, even if such instrument was stolen," 
and a pledge by the owner's agent in possession will protect a 
bona fide pledgee, even if the agent's actual authority was insuf- 
ficient."* An administrator or executor may make a valid pledge 
of property belonging to the estate, within the range of his au- 
thority." A receiver may pledge property of the corporation."* 

§ 3036. Delivery in pledge. — The pledge or bailment rela- 
tion does not commence until there is an actual transfer of pos- 
session. Prior to such transfer' there may exist an executory 
contract to pledge, for breach of which, if founded upon suffi- 
cient consideration, the courts will award damages to either party 
for the other's failure to perform,"' or in some cases equity may 
decree specific performance. The element essential to create the 
pledgee's right in the goods pledged is transfer of possession, and, 
in general, a pledge does not exist unless the pledgee has pos- 
session and actual control of the property."^ Delivery to the 
pledgee, and his acceptance and continued possession are the only 
notice to the world in general of the pledgee's rights, and these 
take the place of the recording of a mortgage, or the filing of 

■" Sheffield v. London Bank, 13 App. °° Schouler Bailments Including 

Cas. 333; Bealle v. Southern Bank, Carriers (1905), § 156; Schouler 

57 Ga. 274; Fisher V. Fisher, 98 Mass. Bailments (3d ed.), § 188; Van 

303 ; Farwell V. Importers' & Traders' Zile Bailments (2d ed.), § 237a; 

Nat. Bank, 90 N. Y. 483. Dunn v. Train, 125 Fed. 221, 60 C. C. 

"Goldstein v. Hort, 30 Cal. 372; A. 113; American Can Co. v. Erie 

Jarvis v. Rogers, 13 Mass. 105. See Preserving Co., 183 Fed. 96, 105 C. 

note 14 L. R. A. 234. C. A. 388; Corbett v. Underwood, 83 

"^ Russell V. Plaice, 18 Beav. 21; 111. 324, 25 Am. Rep. 392; Franklin 

Pickens v. Yarborough's Admr., 26 Nat. Bank v. Whitehead, 149 Ind. 560, 

Ala. 417, 62 Am. Dec. 728; Carter v. 49 N. E. 592, 39 L. R. A. 725, 63 Am. 

Manufacturers' Nat. Bank, 71 Maine St. 302; In re Lanaux's Succession, 

448, 36 Am. Rep. 338; Hutchins v. 46 La. Ann. 1036, 15 So. 708, 25 L. R. 

State Bank, 12 Mete. (Mass.) 421; A. 577; Moors v. Reading, 167 Mass. 

Tuttle V. First Nat. Bank of Green- 322, 45 N. E. 760, 57 Am. St. 460; 

field, 187 Mass. 533, 73 N. E. 560, 105 Harding v. Eldridge, 186 Mass. 39, 

Am. St. 420; Leitch v. Wells, 48 N. 71 N. E. 115; Chitwood v. Lanyon 

Y. 585 ; In re Woods' Appeal, 92 Pa. Zinc Co., 93 Mo. App. 225 ; Buffalo 

St. 379, 37 Am. Rep. 694. See Solo- German Ins. Co. v. Third Nat. Bank, 

mon V. Altenborough (1912), 1 Ch. 162 N. Y. 163, 56 N. E. 521, 48 L. R. 

451. Ann. Cas. 1912C. 975 and note. A. 107; Virginia-Carolina Chemical 

■^ State Bank of Va. v. Domestic Co. v. McNair, 139 N, Car. 326, 51 S. 

&c. Co., 99 Va. 411, 39 S. E. 141, 86 E. 949; Nashville Trust Co. v. First 

Am. St. 891. _ Nat. Bank, 123 Tenn. 617, 134 S. W. 

"Schouler Bailments Including 311; Geilfuss v. Corrigan, 95 Wis. 

Carriers (1905), § 156; Schouler 651, 70 N. W. 306, 37 L. R. A. 166, 60 

Bailments (3d ed.), § 188. Am. St. 143. 



§ 3036 BAILMENTS. 280 

a lien."* Delivery may be made by an agent of the pledgor/" or 
to an agent of the pledgee,"^ and it has been held that a clerk 
of the pledgor may hold goods as the agent of the pledgee, his 
special possession for the pledgee being distinct from his duties 
as clerk/^ And even the pledgor himself, as between the parties, 
may hold as the agent of the pledgee."^ It is said by Mr. 
Schouler, in a recent text-book, "Two leading conclusions may 
be drawn from the precedents which form the modern mosaic of 
pledge delivery, i. That in the growing complexity of commer- 
cial and mercantile transactions, with so many new classes of in- 
corporeal rights coming into the list of things personal, the dis- 
position increases to apply to all chattel transfers the test of 
mutual intent on equitable considerations; so that the English 
and American courts, while abating little of the common-law 
theory that full change of possession must attend every pledge 
transaction, have come to swerve very far from it in practice. 
2. That, with the present laxity of construction, pledge delivery 
seems to comport itself differently under these three leading 
aspects: (a) As between the pledge parties themselves, (b) as 
between the pledge parties and the pledgor's general creditors, 
and (c) as between pledge parties and those like a pledgor's at- 
taching creditors or purchasers, or new parties lending on se- 
curity of the thing, who acquire intervening rights in rem with- 
out notice. Moreover, as we have seen, (d) the element of no- 
tice to stakeholder, custodian, or debtor is in many transactions 
a vital one ; and the pledgee's rights as concerns such a party re- 
quire consideration.""* With these principles in mind, we shall 
consider some of the various kinds of delivery which have been 
held good by the courts in relation to various ones of these three 
classes. 

""See Van Zile Bailments (2d ed.), H. 430; City Bank v. Perkins, 29 N. 

§ 237a, and cases cited in note 58 Y. 554, 86 Am. Dec. 332; Johnson v. 

supra. Actual and continuous posses- Smith, 11 Humph. (Tenn.) 396. 

sion of the pledged article by the ™ Sumner v. Hamlet, 12 Pick, 

pledgee is essential to preserve his (Mass.) 76; Combs v. Tuchelt, 24 

lien. Gamson v. Pritchard, 210 Mass. Minn. 423. 

296, 96 N. E. 715. " Cooper v. Ray, 47 111. S3 ; Par- 

^ Cartwright v. Wilmerding, 24 N. shall v. Eggert, 54 N. Y. 18; In re 

Y. 521. See note, 14 L. R. A. 234. Rawson, 2 Lowell (U. S.) 519. 

" Weens v. Delta Moss Co., 33 La. " Schouler Bailments Including 

Ann. 973; Boynton v. Payrow. 67 Carriers (1905), § 166. 
Maine 587; Brown v. Warren, 43 N. 



28 1 PLEDGES. § 3037 

§3037. Constructive delivery. — The general rule is that 
there must be actual delivery of corporeal chattels, and yet con- 
structive delivery of these is good between the parties."" Where 
property is in the possession of a third party, actual delivery to 
the pledgee is not necessary, but an order to the keeper, or notice 
to the keeper of a written pledge contract, may constitute con- 
structive delivery, and thus the keeper becomes the agent of the 
pledgee in caring for the goods."" The pledgee may be already 
in possession of the goods, for some other purpose or other 
pledge, and in such case, a pledge contract between the parties 
operates as a constructive transfer."^ So goods in a warehouse 
may be delivered in pledge by the transfer of a receipt with such 
intention, and goods on board a vessel at sea, or on a train in 
transit, by delivery of the bill of lading,"* and the delivery of the 
key of a warehouse in which goods are stored is a. symbolical 
delivery of the goods."" 

§ 3038. Certain kinds of constructive delivery not good as 
to creditors. — Though, where a public warehouseman exe- 
cutes and delivers to his creditor a receipt for property contained 

""City Fire Ins. Go. v. Olmsted, 33 bill his goods to his agent and store 

Conn. 476 ; Tuttle v. Robinson, 78 111. them in a separate warehouse for him 

332; Keiser v. Topping, 72 111. 226; upon his making advances, equity 

In re Collins Appeal, 107 Pa. St. considers the property set aside when 

590, 52 Am. Rep. 479; Casey v. Cav- the invoices are sent, though not ac- 

aroc, 96 U. S. 467, 24 L. ed. 779. A tually set apart, and such delivery to 

setting apart of certain property as a the pledgee is good against the manu- 

pledge or security is a sufficient de- facturer's receiver. Garrison v. Ver- 

livery as between the parties. F. P. mont Mills, 154 N. Car. 1, 69 S. E. 

Gluck Co. V. Therme (Iowa), 134 N. 743, 31 L. R. A. (N. S.) 450. 

W. 438. "'Michigan Cent. R. Co. v. Phillips, 

°° Michigan Cent. R. Co. v. Phillips, 60 111. 190 ; Franklin Nat. Bank v. 

60 111. 190- Whitaker v. Sumner, 20 Whitehead, 149 Ind. 560, 49 N. E. 

Pick. (Mass.) 399; Hathaway v. 592, 39 L. R. A. 725, 63 Am. St. 302; 

Haynes, 124 Mass. 311; First Nat. First Nat. Bank v. Crocker, 111 

Bank v Kelly, 57 N. Y. 34; Cart- Mass. 163; Conrad v. Fisher, 37 Mo. 

wright V. Wilmerding, 24 N. Y. 521 ; App. 352, 8 L. R. A. 147; Third Nat. 

First Nat. Bank v. Harkness, 42 W. Bank v. Hays, 119 Tenn. 729, 108 S. 

Va. 156, 24 S. E. 548, 32 L. R. A. W. 1060, 14 Am, & Eng. Ann. Cas. 

408- Freiburg v. Dreyfus, 135 U. S. 1049; Gibson v. Stevens, 8 How. (U. 

478' 24 L. ed. 206, 10 Sup. Ct. 716; S.) 384, 12 L. ed. 1123; Rice v. Cut- 

Dows V. Nat. Exch. Bank, 91 U. S. ler, 17 Wis. 351, 84 Am. Dec. 747n. 

618, 23 L. ed. 214. ™Ryall v. Rolle, 1 Atk. 165; Chap- 

* Story Bailments (9th ed.), § 297; lin v. Rogers, 1 East 192; Wilkes v. 

Brown V. Warren, 43 N. H. 430; Van Ferris, 5 Johns. (N. Y.) 335, 4 Am. 

Blarcom v. Broadway Bank, 37 N. Y. Dec. 364n. 
540. Where a manufacturer was to 



§ 3038 BAILMENTS. 282 

in his warehouse and owned by him in order to secure a debt by 
a lien upon the property, it is a valid constructive delivery which 
operates as a pledge,'" one not a public warehouseman cannot 
make a pledge valid against creditors by issuing and delivering 
certificates similar to the receipts of public warehousemen, pur- 
porting to cover property in the pledgor's possession, where there 
is nothing outside the certificate to indicate the intention to create 
a pledge.'^ A contract assigning a liquor license as collateral 
security is not valid as against creditors where it is neither exe- 
cuted, acknowledged, filed nor recorded, as required by law, and 
the license is left in possession of the assignor.'^ A book account 
cannot be pledged by a meix delivery of a copy of it, without 
delivery of the book itself, or any assignment in writing of the 
owner's right, as against a bank which without notice collects 
the account from the debtor through a general arrangement with 
the pledgor, the debtor and the collecting bank having no notice 
of the attempted pledge.'^ When a manufacturing company 
enters into an arrangement with a warehouse company by which 
the latter issues receipts to the former for a portion of its manu- 
factured goods which are left in the possession of the manufac- 
turer, and stored on premises occupied by it, under a lease pur- 
porting to be for the warehouse company, the transfer of such 
receipts as collateral for loans does not create a valid pledge of 
the goods, as against the trustee in bankruptcy of the manufac- 
turer.''^ Where a statute provides for recording of charges upon 
personal property unless accompanied by actual possession, a bank 
cannot, by setting aside in its vaults certain securities to secure 
mortgage certificates of deposit, create a superior right to these 

"State V. Robb-Lawrence Co., 17 Malting Co., 41 Wash. 385, 83 Pac. 

N. Dak. 257, 115 N. W. 846, 16 L. R. 898, 4 L. R. A. (N. S.) 626. 

A. (N. S.) 227 and note. "American Exchange Nat. Bank 

'^ Fourth Street Nat. Bank v. Tay- v. Federal Nat. Bank, 226 Pa. 483, 75 

lor, 172 Fed. 177, 96 C. C. A. 629, 30 Atl. 683, 27 L. R. A. (N. S.) 666 and 

L. R. A. (N. S.) 552 and note; note, 134 Am. St. 1071, 18 Am. & Eng. 

Franklin Nat. Bank v. Whitehead, Ann. Cas. 444. 

149 Ind. 560, 49 N. E. 592, 39 L. R. " Security Warehousing Co. v. 

A. 725, 63 Am. St. 302; Geilfuss v. Hand, 206 U. S. 415, 51 L. ed. 1117, 

Corrigan, 95 Wis. 651, 70 N. W. 306, 27 Sup. Ct. 720, 11 Am. & Eng. Ann. 

37 L. R. A. 166, 60 Am. St. 143. Cas. 789. 

"Deggender v. Seattle Brewing & 



283 PLEDGES. § 3039 

holders of certificates as against the assignee for the benefit of 
general creditors/' 

§ 3039. Delivery of negotiable instruments in pledge. — A 

negotiable instrument requiring indorsement to make a valid 
transfer should be indorsed and actually delivered in order to 
make a valid pledge good as to everybody.'® In one or two 
jurisdictions, however, it is held that such an instrument may be 
pledged by delivery and acceptance and the pledge is good against 
subsequent creditors." A pledge of negotiable paper good be- 
tween the parties but subject to outstanding equities may be 
made by mere delivery to the pledgee.'* Where a bona fide 
pledgee of negotiable instruments has received them in the due 
course of business, before maturity, for a valuable consideration, 
and without notice of any equities, he is a pledgee for value, and 
is entitled to the same rights against the holders of equities un- 
known to him which a purchaser of the paper could claim under 
like circumstances.'® He is under the same duties as a purchaser 
to inquire if there is anything upon the face of the paper which 
would cause a reasonably prudent man to make inquiry, and for 
failure to inquire is held to notice of whatever he would have 
ascertained by investigation.*" There is a conflict among the 
authorities as to whether a pre-existing debt is such a considera- 

"Burnes v. Daviess County Bank gomery, 100 U. S. 239, 25 L. ed. 580; 

&c. Co., 135 Ky. 355, 122 S. W. 182, Kinney v. Kruse, 28 Wis. 183. Where 

25 L. R. A. (N. S.) 525, 135 Am. the owner of negotiable paper in- 

St. 467. dorsed it in blank and deposited it 

"Van Zile Bailments (2d ed.), § in a bank for safe-keeping and an 

242. officer of the bank misappropriated it 

"Smith V. Jennings, 74 Ga. 551; wrongfully and pledged it, the 

Casey v. Schneider, 96 U. S. 496, 24 pledgee's right is superior to the 

L. ed. 790. owner's, even though the bank offi- 

" Coombs V. Warren, 34 Maine 89 ; cer has, ostensibly for collection, re- 
Dickey V. Pocomoke City Nat. Bank, covered the instrument and restored 
89 Md. 280, 43 Atl. 33; Van Riper v. it to its owner. Voss v. Chamber- 
Baldwin, 19 Hun (N. Y.) 344, 85 N. lain, 139 Iowa 569, 117 N. W. 269, 
Y. 618. See also, Morris v. Preston, 19 L. R. A. (N. S.") 106n, 130 Am, 
93 111. 215; Tucker v. New Hamp- St. 331; Boston Steel & Iron Co. v. 
shire Sav. Bank, 58 N. H. 83, 42 Am. Stener, 183 Mass. 140, 66 N. E. 646, 
Rep. 580. 97 Am. St. 426; New Memphis Gas- 

" Exchange Bank v. Butner, 60 Ga. light Co. Cases, 105 Tenn. 268, 60 S. 

654; Worcester Nat. Bank v. Chee- W. 206, 80 Am. St. 880. 

ney, 87 111. 602; Warner v. Fourth * First Nat. Bank v. National 

Nat. Bank, 115 N. Y. 251, 22 N. E. Broadway Bank, 22 App. Div. (N. 

172; Kempner v. Comer, 73 Tex. 196; Y.) 24, 81 N. Y. St. 880, 47 N. Y. S. 

Gates V. First Nat. Bank of Mont- 880, 



§ 3040 BAILMENTS. 284 

tion for the pledge of negotiable paper that the pledgee under 
such circumstances becomes a holder for value, protected against 
prior equities. All courts would hold such a consideration good 
between the parties to the pledge, but it seems that the better rule is 
that unless the pledgee has surrendered something to the pledgor, 
and the pledgor has gained something in return for the pledge, 
there is no such consideration moving between the parties as 
will give the pledgee any better right than the pledgor had.^^ But 
eminent authorities hold the contrary viev;, that a pre-existing 
debt is a valuable consideration for the pledge of negotiable se- 
curities, and protects the pledgee from all prior equities.*^ And 
where the pledgor has surrendered other securities of value or 
extended the time of payment, or where the original debt has 
been actually extinguished, this is a sufficient consideration to 
make the transferee a holder for value.^^ Where a note is in- 
valid between the parties the holder of the same as collateral may 
not recover the entire amount of the note, but only the amount 
to which it is collateral.** 

§ 3040. Pledge of corporate stock. — It was once thought 
that, since a valid pledge requires the delivery of the property 
by the pledgor to the pledgee, there could be no pledge of cor- 
porate stock. But it is now held that it can be pledged by trans- 
fer of possession of the certificate. Mere manual transfer 
of the certificate is not sufficient,*^ but there must be a transfer 

"^Schloss V. Feltus, 103 Mich. S2S, of Republic, 102 U. S. 14, 26 L. ed. 

61 N. W. 663, 36 L. R. A. 161n; 61. 

Phcenix Ins. Co. v. Church, 81 N. Y. *" Goodwin v. Conklin, 8S N. Y. 21 ; 

218, 59 How. Pr. (N. Y.) 293, i1 Mayer v. Heidelbach, 123 N. Y. 332, 

Am. Rep. 494 ; Bay v. Coddington, 25 N. E. 416, 9 L. R. A. 850. Time of 

5 Johns. Ch. (N. Y.) 54; Comstock payment extended. Farmers' Nat. 

V. Hier, 1i N. Y. 269, 29 Am. Rep. Bank v. McCall, 25 Okla. 600, 106 

142. See note 31 L. R. A. (N. S.) Pac. 866, 26 L. R. A. (N. S.) 217. 

287. Also ante, vol. 1, Ch. IX. Note of third party taken in lieu of 

"^ Exchange Nat. Bank v. Coe, 94 former collateral released is valid 

Ark. 387, 127 S. W. 453, 31 L. R. A. consideration. Zollman v. Jackson 

(N. S.) 287 and note; National Bank Trust & Sav. Bank, 238 111. 290, 87 

of St. Joseph V. Dakin, 54 Kans. 656, N. E. 297, 32 L. R. A. (N. S.) 858n. 

39 Pac. 180, 45 Am. St. 299; Mer- ''Benton v. Sikyta, 84 Nebr. 808, 

chants' Ins. Co. v. Abbott, 131 Mass. 122 N. W. 61, 24 L. R. A. (N. S.) 

397 ; Spaulding v. Kendrick, 172 Mass. 1057. 

71, 51 N. E. 453; Swift v. Tyson, 16 ''Wagner v. Marple, 10 Tex. Civ. 

Pet. (U. S.) 1, 10 L. ed. 865; Brook- App. 505, 31 S. W. 691. See note, 57 

lyn City &c. R. Co. v. National Bank Am. St. 389. 



28s 



PLEDGES. 



§ 3040 



in writing.^" Transfer by indorsement and upon the books of 
the company to be held by the pledgee as a pledge is of course a 
sufficient delivery, but this is not necessary to create a valid 
pledge, for indorsement of the certificate in blank and its delivery 
to the pledgee is sufficient, as this procedure authorizes the 
pledgee to write over the signature of the owner a full assignment 
and directions to transfer on the books, such a usage being well 
recognized in business," and the pledgee's rights under such a 
transfer are superior to those of subsequent attaching creditors,'^ 
unless the statute or the charter of the corporation requires that 
a transfer must be recorded on its books to be valid.*® The 
pledgee of stock has the same right as the owner to protect the 
assets of the corporation."" If he appears on the books of the 
corporation as the owner of the stock, he is liable as a stockholder 
to its creditors,"^ and liable for assessments,'^ and has the right 



"^ Brewster v. Hartley, 37 Cal. IS, 
99 Am. Dec. 237; Nisbit v. Macon 
Bank & Trust Co., 12 Fed. 686, 4 
Woods (U. S.) 464; Wilson v. Little, 
2 N. Y. 443, 51 Am. Dec. 307; French 
V. White, 78 Vt. 89, 62 Atl. 35, 2 L. 
R. A. (N. S.) 804, and note. 

" McFall V. Buckeye Grangers &c. 
Assn., 122 Cal. 468, 55 Pac. 253, 68 
Am. St. 47; Mt. Holly &c. Turnpike 
Co. V. Ferree, 17 N. J. Eq. 117; Kort- 
right V. Buffalo Commercial Bank, 20 
Wend. (N. Y.) 91; German Union 
Bldg. &c. Assn. v. Sendraeyer, 50 Pa. 
St. 67. 

^ Scott V. Pequonnock Nat. Bank, 
15 Fed. 494 ; Mapleton Bank v. Stand- 
rod, 8 Idaho 740, 71 Pac. 152, 67 L. 
R. A. 656 and note; Boston Music 
Hall Assn. v, Cory, 129 Mass. 435; 
Everett v. Farmers' &c. Bank, 82 
Nebr, 191, 117 N. W. 401, 20 L. R. A. 
(N. S.) 996 and note; State Banking 
& Trust Co. V. Taylor, 25 S. Dak. 577, 
127 N. W. 590, 29 L. R. A. (N. S.) 
523. 

"Parrott v. Byers, 40 Cal. 614; 
Fisher v. Essex Bank, 5 Gray (Mass.) 
373; Scripture v. Francestown Soap- 
stone Co., SO N. H. 571; Van Zile 
Bailments (2d ed,), § 251. 

"Andrews Co. v. Columbus Nat. 
Bank, 129 Ga. 53, 58 S. E. 633, 12 
Am. & Eng. Ann. Cas. 616, 121 Am. 



St. 186n, and exhaustive note upon 
liabilities and duties of pledgee of 
corporate stock; Green v. Hedenberg, 
159 111. 489, 50 Am. St. 178, 42 N. E. 
851 ; Cream City Mirror Plate Co. v. 
Coggeshall, 142 Wis. 651, 126 N. W. 
44, 135 Am. St. 1091. 

" National Commercial Bank v. Mc- 
Donnell, 92 Ala. 387, 9 So. 149 ; Adams 
v. Clark, 36 Colo. 65, 85 Pac. 642, 10 
Am. & Eng. Ann. Cas. 774, and note; 
Calumet Paper Co. v. Stotts Inv. Co., 
96 Iowa 147, 64 N. W. 782, 59 Am. 
St. 362; Tierney v. Ledden, 143 Iowa 
286, 121 N. W. 1050, 21 Am. & Eng. 
Ann. Cas. 105 ; Flynn v. American 
Banking & Trust Co., 104 Maine 141, 
69 Atl. 771, 19 L. R. A. (N. S.) 428, 
129 Am. St. 378; Marshall Field & 
Co. v. Evans &c. Co., 106 Minn. 85, 
118 N. W. 55, 19 L. R. A. (N. S.) 
249 and note; Simmons v. Hill, 96 
Mo. 679, 10 S. W. 61, 2 L. R. A. 476; 
Pullman v. Upton, 96 U. S. 328, 24 
L. ed. 818; note, 121 Am. St. 197. 

=' Welles V. Larrabee, 36 Fed. 866, 
2 L. R. A. 471 ; Germania Nat. Bank 
V. Case, 99 U. S. 628, 25 L. ed. 448; 
Bowden v. Johnson, 107 U. S. 251, 27 
L. ed. 386, 2 Sup. Ct. 246. The 
pledgee of bank stock takes subject 
to the statutory right of the bank to 
forfeit the stock for nonpayment of 
assessments. Corbin Bkg. Co. v. 



§ 3041 



BAILMENTS. 



286 



to vote the stock.'^ If the transfer is not on the books/* or the 
stock is transferred to him as pledgee, ''^ he is not liable as a 
stockholder. The pledgee of stock by indorsement may transfer 
it and give good title to a bona fide purchaser. °° The pledgee has 
the right to collect dividends accruing on the stock while he 
holds it." 



§ 3041. Delivery of bills of lading, and other quasi-nego- 
tiable papers. — The transfer of a bill of lading in a manner 
which will give to the pledgee possession and control of the prop- 
erty which it represents is necessary to constitute a valid pledge, 
but this may be symbolical. The general rules as to transfer of 
title by bill of lading, discussed later in the chapter on Carriers, 
are entirely applicable."* In certain instances a mere delivery of 
the bill with intention to pledge, has been held good"" and deliv- 
ery of the bill indorsed in blank with a similar intention is a suf- 
ficient delivery.^ A warehouse receipt may be delivered in pledge 
with an indorsement in blank,^ and a mere delivery of such re- 



Mitchell, 141 Ky. 172, 132 S. W. 426, 
31 L. R. A. (N. S.) 446. See note, 
39 L. R. A. (N. S.) 292. 

""Haynes v. Griffith, 16 Idaho 280, 
101 Pac. 728; Commonwealth v. Dal- 
zell, 152 Pa. St. 217, 25 Atl. 535, 34 
Am. St. 640. See Cohen v. Big Stone 
Gap Iron Co., Ill Va. 468, 69 S. E. 
359, Ann. Cas. 1912, 203 and note. 

"Welles V. Larrabee, 36 Fed. 866, 
2 L. R. A. 471; Henkle v. Salem 
Mfg. Co., 39 Ohio St. 547. 

"= Marshall Field & Co. v. Evans 
&c. Co., 106 Minn. 85, 118 N. W. 55, 
19 L. R. A. (N. S.) 249, and note. 
Though stock was issued by a corpo- 
ration directly to the person named 
as holder, yet if it was issued to him 
to secure the performance of an 
agreement, he is a pledgee only, and 
not liable to creditors as a stock- 
holder. Colonial Trust Co. v. AIc- 
Millan, 188 Mo. 547, 87 S. W. 933, 
107 Am. St. 335. The pledgee takes 
only a special interest in such case. 
Baker v. Old Nat. Bank, 86 Fed. 
1006; Pauly v. State Loan &c. Co., 
165 U. S. 606, 41 L. ed. 844, 17 Sup. 
Ct. 465 ; White R. S. Bank v. Capital 
Sav. Bank, 77 Vt. 123, 59 Atl. 197, 
107 Am. St. 754. 



" Gurley v. Reed, 190 Mass. 509, 11 
N. E. 642; Newton v. Fay, 10 Allen 
(Mass.) 505; Walker v. Detroit 
Transit R. Co,, 47 Mich. 338, 11 N. 
W. 187; Brick v. Brick, 98 U. S. 514, 
25 L. ed. 256. 

" Maxwell v. Greenville Nat. Bank, 
70 S. Car. 532, SO S. E. 195, 3 Am. & 
Eng. Ann. Cas. 723. 

"'See §§ 3155 et seq. 

"Peters v. Elliott, 78 111. 321; 
Frederick v. Knox, 53 Md. 612; First 
Nat. Bank v. Dearborn, 115 Mass. 
219, IS Am. Rep. 92; First Nat, Bank 
of Cairo v. Crocker, 111 Mass. 163; 
Scharff v. Meyer, 133 ^lo. 428, 34 S. 
W. 858, 54 Am. St. 672, 42 Cent. L. 
J. 367 ; Richardson v. Nathan, 167 Pa. 
St. 513, 31 Atl. 740; Gibson v. Stev- 
ens, 8 How. (U. S.) 384, 12 L. ed. 
1123; Neill v. Rogers Bros. Produce 
Co., 41 W. Va. i7, 23 S. E. 702. 

^Van Zile Bailments (2d ed.), §254 

^Franklin Nat. Bank v. Whitehead, 
149 Ind. 560, 49 N. E. 592, 39 L. R. 
A. 725, 63 Am. St. 302; Conrad v. 
Fisher, 37 Mo. App. 352, 8 L. R. A. 
147; Freiburg v. Dreyfus, 135 U. S. 
478, 34 L. ed. 206, lO Sup. Ct. 716; 



287 PLEDGES. § 3042 

ceipt without indorsement with the intention to pledge is good 
between the parties." Likewise, a sufficient pledge of an insur- 
ance policy may be made by indorsement in blank and delivery.* 
The delivery in pledge of a note secured by a mortgage carries 
with it the mortgage security f but a delivery of the mortgage 
unaccompanied by dehvery of the evidences of the debt secured 
conveys no right. ^ 

§ 3042. Pledgee's right to possession of pledge. — The 

pledgee has the right to exclusive possession of the thing pledged, 
and this right is good against all the world, including the pledgor, 
during the time for which it was pledged, and continues until 
the obligation which the pledge is to secure is fully satisfied.'' To 
maintain his rights the pledgee may bring replevin against one 
who tortiously deprives him of possession,^ or may bring trover 
for a conversion" and as against a third party may recover, in the 
latter action, the full value of the thing pledged, being held a 
trustee for the pledgor as to any amount in excess of his lien,^° 
but if the pledgor unwarrantedly interferes with his possession 
he may recover from him only to the extent of his special inter- 
ests^ The pledgee loses his right to possession by redelivery to 
the pledgor with the intention of abandoning such possession, but 
not if he delivers it to him for some special purpose, after which 
it is to be returned,^^ or if it is delivered to the pledgor as the 

Rice V. Cutler, 17 Wis. 351, 84 Am. ' Noles v. Marable, SO Ala. 366. 

Dec. 747; Jones Pledges, § 280. "Treadwell v. Davis, 34 Cal. 601, 

'Blanc V. Germania Nat. Bank, 114 94 Am. Dec. 770; United States Exp. 

La. 739, 38 So. S37; Gibson v. Stev- Co. v. Meints, 72 111. 293. 

ens, 8 How. (U. S.) 384, 12 L, ed. "" Treadwell v. Davis, 34 Cal. 601, 

1123. 94 Am. Dec. 770; United States Exp. 

'Norwood V. Guerdon, 60 111. 253. Co. v. Meints, 72 III. 293; Adams v. 

° Van Zile Bailments (2d ed,), § 270. O'Connor, 100 Mass. 515, 1 Am. Rep. 

° Colebrooke, Collateral Securities, 137. 

185 ; Hamilton v. Lubukee, 51 111. 415, " Treadwell v. Davis, 34 Cal. 601, 

99 Am. Dec. 562; Wanzer v. Gary, 94 Am. Dec. 770; Hurst v. Goley, 15 

76 N. Y. 526. Fed. 645; Ingersoll v. Van Bokkelin, 

'American Pig Iron Storage War- 7 Cow. (N. Y.) 670; Lyle v. Barker, 

rant Co. v. German, 126 Ala. 194, 28 5 Bin. (Pa.) 457. 

So. 603, 85 Am. St. 21; Fowle v. "Hutton v. Arnett, 51 111. 198; 

Child, 164 Mass. 210, 41 N. E. 291, Thayer v. Dwight, 104 Mass. 254; 

49 Am. St. 451 ; Coleman v. Shelton, First Nat. Bank v. Bradshaw 

2 McCord Eq. (S. Car.) 126, 16 Am. (Nebr.), 135 N. W. 830; Hays & St. 

Dec. 639; Yeatman v. Savings Inst., John v. Riddle, 1 Sandf. (N. Y.) 248; 

95 U. S. 764, 24 L. ed. 589. Casey v. Cavaroc, 96 U. S. 467, 24 L. 



§ 3043 BAILMENTS. 288 

agent of the pledgee," the pledgee's rights are at least not lost as 
against the pledgor. Possession by the pledgee, it seems, is essen- 
tial as against third parties, though the pledgee's agent may hold 
possession for him.^* 

§ 3043. Pledgee's right to use — Expenses and profits. — 

The pledgee has no right to use the property pledged to his per- 
sonal profit, or to its injury, but only so far as is necessary in 
its proper care." All profit or beneficial use must go to the 
credit of the pledgor and in fact becomes a part of the pledged 
property to be accounted for by the pledgee.^" This includes the 
increase from herds, and milk from cows,^^ likewise dividends 
collected on stocks,^^ and interest on bonds,^" and presumably, if 
the pledgee of a horse, or of a machine, made use of such pledge, 
the pledgor might, instead of stiing for conversion, apply the 
reasonable value of such use to the reduction of the debt secured. 
The pledgee must bear the expenses reasonably necessary for the 
proper preservation of the pledge, but these become a charge 
against the pledgor, and a part of the debt secured, and must be 
repaid before the goods can be reclaimed.^" Among such ex- 
penses are included the premiums on an insurance policy,^^ and 
money paid to remove an incumbrance superior to the lien of the 
pledge,"^ or assessments on corporate stock.-^ 

ed. 779. See Manny v. Wilson, 122 droscoggin R. Co. v. Auburn Bank, 

N. Y. S. 16, 137 App. Div. (X. Y.) 48 Maine 335; Merrifield v. Baker, 9 

140. Allen (Mass.) 29. 

^'See Hale Bailments, p. 172; " Coggs v. Bernard, 2 Ld. Raym. 

Treadwell v. Davis, 34 Cal. 601. 94 909. 

Am. Dec. 770; First Nat. Bank v. " Hunsaker v. Sturgis, 29 Cal. 142; 

Nelson, 38 Ga, 391, 95 Am. Dec. 400; Maxwell v. Greenville Nat. Bank, 70 

Dav V. Swift, 48 :Maine 368. S. Car. 532, 50 S. E. 195, 3 Am. & 

" Latta V. Tutton, 122 Cal. 279, 54 Eng. Ann, Cas. 723 and note, 

Pac. 844, 68 Am. St. 30 ; Cooley v. '■' Androscoggin R. Co. v. Auburn 

Minnesota Transfer R. Co., S3 Minn. Bank, 48 Maine 335. 

327, 55 N. W. 141, 39 Am. St, 609; =°Fagan v. Thompson, 38 Fed. 467; 

First Nat. Bank V, Caperton, 74 Miss. Starrett v. Barber, 20 Maine 457; 

857, 22 So. 60, 60 Am. St. 540. Hills v. Smith, 28 N, H, 369; Hen- 

'" Story Bailments (9th ed,), §§ 99, dricks v. Robinson, 2 Johns. Ch. (N. 

329; Mc Arthur V. Howett, 72 111. 358; Y.) 283; Rowan v. State Bank 45 

Stearns v. Marsh, 4 Denio (N. Y.) Vt, 160. But see Meyer v. Carmer, 

227, 47 Am, Dec, 248; Laurence v. 135 N, Y. S. 64. 

Maxwell, 53 N. Y, 19 ; Thompson v. "" Raley v. Ross, 59 Ga. 862 ; Rowan 

Patrick, 4 Watts (Pa.) 414, v. State Bank, 45 Vt. 160. 

"Goddard Bailments, § 82; Schou- "Furness v. Union Nat. Bank, 147 

ler Bailments (3d ed ), §§ 211-212; 111, 570, 35 N. E. 624. 

Hunsaker v. Sturgis, 29 Cal, 142; An- ='' McCalla v. Clark, 55 Ga. 53. 



289 PLEDGES. § 3044 

§ 3044. Care demanded of pledgee — Collection of negoti- 
able paper. — Since a pledge is a bailment for mutual benefit, 
the general rule applies that the pledgee is held to exercise ordi- 
nary care for the preservation and protection of the pledge, and 
what may be such care is dependent upon the character of the 
property, the situation of the parties, and other circumstances.^* 
So the pledgee of negotiable paper held as collateral property is 
held under the duty to take the necessary steps to preserve the 
rights represented by the paper.^^ If it is indorsed, he must 
present it for payment when due, and if not paid, must give the 
notice necessary to charge the indorsers, or be liable for ensuing 
loss."" If a prudent man would do so, he must sue on the securi- 
ties," and if there is danger of loss, he should collect the col- 
lateral, even though the debt secured by the pledge is not yet 
due.^* But against the pledgor the pledgee is held to only rea- 
sonable diligence in attempting to collect negotiable paper,^" and 
if he uses such diligence he will not lose a right to recover on the 
pledge debt, even though he has failed to give notice of nonpay- 
ment to the pledgor indorser, or to have the note protested.^" 

"Damon v. Waldtenfel, 99 Cal. Am. Lead. Cas. Eq. (Sth ed.) 411, 

234, 33 Pac. 903 ; Cooper v. Simpson, 423, note ; note, 68 L. R. A. 482. 

41 Minn. 46, 42 N. W. 601, 4 L. R. A. " Ex parte Mure, 2 Cox Ch. 63 ; 

194, 16 Am. St. 667 ; Ware v. Squyer, Slevin v. Morrow, 4 Ind. 425 ; Joliet 

81 Minn. 388, 84 N. W. 126, 83 Am. Iron &c. Co. v. Scioto Fire Brick Co., 
St. 390; Willets v. Hatch, 132 N. Y. 82 111. 548, 25 Am. Rep. 34; Hazard 
41, 30 N. E. 251, 17 L. R. A. 193, and v. Wells, 2 Abb. N. Cas. (N. Y.) 444; 
note; Cutting v. Marlor, 78 N. Y. 454. Whitin v. Paul, 13 R. I. 40. 

''Sampson v. Fox, 109 Ala. 662, 19 ''Hale Bailments, p. 158; Van Zile 

So. 896, 55 Am. St. 950; Reeves v. Bailments (2d ed.), § 317; Bizzell v. 

Plough, 41 Ind. 204; First Nat. Bank Roberts, 156 N. Car. 272, 72 S. E. 378. 

V. O'Connell, 84 Iowa ill, 51 N. W. The pledgee of a mortgage upon real 

162, 35 Am. St. 313 ; Griggs v. Day, estate may foreclose it upon breach of 

136 N. Y. 152, 32 N. E. 612, 18 L. R. the condition of the mortgage unless 
A. 120, 32 Am. St. 704 and note,.affd., prohibited by the pledge agreement. 

137 N. Y. 542, 32 N. E. 1001 ; Hazard Union Trust Co. v. Hasseltine, 200 
V. Wells, 2 Abb. N. Cas. (N. Y.) 444; Mass. 414, 86 N. E. Ill, 16 Am. & 
Montague v. Stelts, il S. Car. 200, Eng. Ann. Cas. 123. 

15 S. E. 968, 34 Am. St. 736; "^ Peru Van Zandt I. Co. v. Burnett 

Rumsey V. Laidley, 34 W. Va. 721, 12 (Okla.), 122 Pac.668; First Nat. Bank 

S. E. '866, 26 Am. St. 935. See note of Philippi v. Kittle, 69 W. Va. 171, 

32 Am. St. 711-31, 83 Am. St. 394. 71 S. E. 109, 37 L. R. A. (N. S.) 699, 

"« Lea V. Baldwin, 10 Ga. 208 ; Scott and full note. 

V. First Nat. Bank, 5 Ind. Ter. 292, ""Westphal v. Ludlow, 2 McCrary 

82 S. W. 751, 68 L. R. A. 488n; Smith (U. S.) 505, 6 Fed. 348; Lawrence v. 
V. Miller, 43 N. Y. 171, 3 Am. Rep. McCalmont, 2 How. (U, S.) 426, 11 
690; Sellers v. Jones, 22 Pa. St. 423; L. ed. 326. See Coleman v. Lewis, 183 
Swift V. Tyson, 16 Pet. (U. S.) 1, 1 Mass. 485, &] N. E. 603, 68 L. R. A. 

19 —Contracts, Vol. 4 



§ 3045 BAILMENTS. 



290 



§ 3045. Pledgee's right to assign pledge.— The pledge is 

an incident of the debt secured and assignable with it, and the 
assignee of the debt together with the pledge obtains all the legal 
rights of the pledgee, and stands in his place." The assignment 
of the debt unaccompanied by a transfer of the pledge passes an 
equitable interest in the security, for the pledgee's interest in the 
property is dependent upon the existence of the debt.^- But if 
the pledge is negotiable paper which has been transferred to a 
bona fide holder, the assignee of the pledge debt acquires no 
rights against such holder.^' And in general the assignee to 
whom the pledgee has transferred the pledge obtains only the 
rights which the pledgee had, and no greater, unless in the case 
of negotiable paper taken in good faith in due course, or where 
the owner has clothed the pledgee with apparent authority, or 
the indicia of ownership. '^^ So to the extent of his own interest 
the pledgee may repledge the property, subject to the terms and 
restrictions of the original pledge contract.^^ 

§ 3046. Conversion by pledgee. — Since it is the duty of the 
pledgee to return the pledge upon redemption, a wrongful sale 
of it is a conversion by him.^® But it is optional with the pledgor 
whether this shall be considered a conversion, and the contract 
thus ended, or whether he shall keep the contract in existence." 

482, 97 Am. St. 450. This rule was Cush. (Mass.) 469; Ballard v. Bur- 
applied to the sale of bank stock in gett, 40 N. Y. 314. 
National Exch. Bank v. Kilpatric, 204 ^ International Bank v. German 
Mo. 119, 102 S. W. 499, 120 Am. St. Bank, 71 Mo. 183, 36 Am. Rep. 468; 
689. Moore v. Metropolitan Nat. Bank, 55 

'■'Whitney v. Peay, 24 Ark. 22; N. Y. 41, 14 Am. Rep. 173; Swan v. 

Brittan v. Oakland Bank of Savings, Produce Bank, 24 Hun (N. Y.) 277; 

124 Cal. 282, 57 Pac. 84, 71 Am. St. Combes v. Chandler, 33 Ohio St. 178; 

58; Bank of Forsyth v. Davis, 113 Cowdrey v. Vandenburgh, 101 U. S. 

Ga. 341, 38 S. E. 836, 84 Am. St. 248; 572, 25 L. ed. 923. 

Bradley v. Parks, 83 111. 169; Jarvis =»McCombie v. Davies, 7 East 5; 

V. Rogers, 15 Mass. 389; Chapman v. Jarvis v. Rogers, 15 Mass. 389; Lewis 

Brooks, 31 N. Y. 75 ; Duncomb v. v. Mott, 36 N. Y. 395. 

New York, H. & N. R. Co., 84 N. Y. "Stearns v. Marsh, 4 Denio (N. 

190; Merchants' Bank v. State Bank, Y.) 227, 47 Am. Dec. 248; Dimock 

10 Wall. (U. S.) 604, 19 L. ed. 1008; v. United States Nat. Bank, 55 N. J. 

Van Zile Bailments (2d ed.), § 286. L. 296, 25 Atl. 926, 39 Am. St. 643; 

"' Homer v. Savings Bank, 7 Conn. Glidden v. Mechanics' Nat. Bank, 530 

478; Stearns v. Bates, 46 Conn. 306; Ohio St. 588, 42 N. E. 995, 43 L. R. 

Esty V. Graham, 46 N. H. 169. A. 737 and note. 

" Coit V. Humbert, 5 Cal. 260, 63 " Hale Bailments, p. 160. See cases 

Am. Dec. 128; Valette v. Mason, 1 cited in note, 43 L. R. A. 760, et seq; 

Ind. 288; Stoddard v. Kimball, 6 Dimock v. United States Nat. Bank, 



291 PLEDGES. § 3047 

If he considers it a conversion, he may either tender the amount 
of his debt and demand his pledge/* or bring an action for dam- 
ages for the sale.^^ It seems that the true measure of damages 
for such a conversion is the market value of the property pledged 
at the time of the conversion/" Ordinarily a pledgee may not 
use the thing pledged without the pledgor's consent, and such use 
is a conversion.*^ Or if he has implied authority to use the 
pledge, and uses it beyond the extent of such authority, this 
is a conversion.*^ The pledgor need not tender the amount 
due on the debt in order to maintain trover against a pledgee 
who has put it out of his power to restore the pledge.*^ A 
conversion of the pledge is held to be in effect a discharge of the 
debt." 

§ 3047. The pledgor's warranty of title to the pledge. — 

The pledgor, of course, retains the general property in the pledge, 
subject to the pledgee's lien. The pledgor, by entering into a 
pledge contract, impliedly warrants that he is the owner of the 
property pledged, or that he has such an interest that he is le- 
gally entitled to pledge it, in analogy to the principle of the law 
of sales, which holds the vendor to an implied warranty of his 
ownership of the thing sold; and if the pledgee is deprived of 
any benefit of the pledge by reason of the defective title of the 

SS N. J. L. 296, 25 Atl. 926, 39 Am. St. Pa. St. 95, 30 Atl. 362 ; Grimes v. 

643. But a waiver of the conversion Watkins, 59 Tex. 133. See Wright v. 

as to a portion of the property Bank of the MetropoHs, 110 N. Y. 

pledged is not a waiver of the con- 237, 18 N. E. 79, 1 L. R. A. 289, 6 

version of the entire property. State Am. St. 3S6n, holding that true meas- 

V. Robb-Lawrence Co., 17 N. Dak. ure is highest market value within 

257, 115 N. W. 846, 16 L. R. A. (N. reasonable time after owner learns of 

S.) 227. conversion. 

"Cooper V. Ray, 47 111. 53; Hope "Lamb v. O'Reilly, 13 Misc. (N. 

V. Lawrence, 1 Hun (N. Y.) 317; Y.) 212, 68 N. Y. St. 114, 34 N. Y. S. 

Talty V. Freedman's Savings & Trust 235; Hawkins v. Hubbard, 2 S. Dak. 

Co., 93 U. S. 321, 23 L. ed. 886. 631, 51 N. W. 774. 

■"Leighton v. Burkham, 4 Ohio C. "Ripley v. Dolbier, 18 Maine 382. 

D. 692, 7 Ohio C. C. 487; Bush v. "Mullen v. J. J. Quinlan & Co., 

Lyon, 9 Cow. (N. Y.) 52; Cass v. 195 N. Y. 109, 87 N. E. 1078, 24 L. 

Higenbotam, 100 N. Y. 248, 3 N. E. R. A. (N. S.) 511; Austin v. Van- 

189. derbilt, 48 Ore. 206, 85 Pac. 519. 6 

"Belden v. Perkins, 78 111. 449; L. R. A. (N. S.) 298, 10 Ann. Cas. 

Robinson v. Hurley, 11 Iowa 410, 79 1123 and note, 120 Am. St. 800; note. 

Am. Dec. 497n; Fowle v. Ward, 113 43 L. R. A. 759. 

Mass. 548, 18 Am. Rep. 534; Blood "Skud v. Tillinghast, 195 Fed. 1. 
V, Erie Dime Savings &c. Co., 164 



§ 3048 BAILMENTS. 292 

pledgor, the pledgor is liable in damages/^ And if the pledgor 
has undertaken to pledge as his own the property of another 
without his consent, he is estopped from asserting against the 
pledgee that he was not the owner.*" The pledgor may avoid the 
absolute warranty of title by disclosing to the pledgee when 
making the contract the qualified nature of his interest. 

§ 3048. Pledgor's right to assign subject to pledge. — Since 
the general property remains in the owner he may transfer it by 
a contract upon sufficient consideration, subject to the lien of 
the pledgee, and all the pledgee's rights.*^ The buyer may con- 
tract to take upon himself all the obligations of the pledgor, even 
becoming personally liable for the debt secured.** In order to 
protect his rights, the assignee of the pledgor should notify the 
pledgee, who then becomes the holder for the assignee, but with- 
out such notice, the pledgee would not be liable to the assignee 
for the return of the property to the pledgor.*" If upon default 
and sale there should be a surplus, the pledgee with notice would 
hold such surplus for the pledgor's assignee.'^*' 

§ 3049. Pledgor's right to sue third parties. — The pledgee's 
duty and right to protect the possession of the pledge do not 
prevent the pledgor from protecting his own interests, especially 
in case of the failure of the pledgee to do so. For instance, if 
the pledgee fails in his duty to collect negotiable paper when it 
falls due, the pledgor may proceed with its collection, or if nec- 
essary to protect his interest, may bring suit, as where notes are 
liable to become barred by the statute of limitations." 

" Goldstein v. Hort, 30 Cat 572 ; subject to the latter's rights. Caroth- 

Mairs v Tavlor, 40 Pa. St. 446. ers Warehouse Bldg. Assn. v. Mc- 

" Goldstein v Hort, 30 Gal. 372. Connell, 30 Okla. 394, 121 Pac. 191. 

"Lou'dilinroutih v. ?\[cNcvin, 74 " Dupre v. Fall, 10 Gal. 430; Gar- 
Gal. 2Stl 14 Pac. 369, 15 Pac. 773. rington v. ^Var(l, 71 N. Y. 360. 
5 Am. St. 435; Whitaker v. Sumner, "Van Elarcom v. Broadway Rank, 
20 Pick (Mass.) ,W0 ; Fettyplace v. 37 N. Y. 540; Duell v. Gudlipp, 1 
Dutch, 13 Pick. C^iass.) 388, 23 Am. Hilt. (N. Y.) 166 
Dec. 688- Bush v. T.vnn, 9 Cow. ( N. °°Van Blarcom v. Broadway Bank, 
Y.) 52; Fletcher v. Howard, 2 Aiken 37 N. Y. 540. 

(Vt ) lis, 16 .\m. Dec. 686; Taggart "' Schouler Bailments (3d ed.), § 

V. Packard, 39 Vt. 628. One wlio 204; Van Zile Bailments (2d ed.), § 

purchases property from the scncral 277; O'Kelley v. Ferguson, 49 La. 

owner, knowing it is in the posses- Ann. 1230, 22 So. 783. 
sion of another as pledgee, takes 



293 PLEDGES. § 3050 

§ 3050. The pledgor's right to redeem. — The pledgor can- 
not be deprived of his right to redeem, even if he has entered into 
a contract creating the pledge which provides that the property 
shall become irredeemable upon his failure to perform the obli- 
gation secured by the pledge, for such a provision in a contract 
is void as against public policy."^ But after the relation of 
pledgor and pledgee has been established by delivery, the pledgor 
may agree with the pledgee that he shall have title to the pledge 
if it is not redeemed by a certain time, for this is merely a condi- 
tional sale of the pledgor's interest.^^ The statute of limitations 
does not begin to run against the pledgor until he has made a 
tender of the amount of the debt, and the pledgee has refused to 
restore the pledge, for until that time the pledgor has no right 
of action against the pledgee.^* But the pledgor cannot recover 
the pledge without paying the debt, even though the statute of 
limitations has run against the debt, for though the debt is 
barred, the security is still alive/'* If the pledgee makes no de- 
mand for redemption, the pledgor has the right to redeem during 
his life and at his death it descends to his personal representa- 
tive.^" At common law the pledgor's interest is not subject to 
attachment, garnishment, or writ of execution," but this has been 
changed by statute in many states.^' Under none of these stat- 
utes, however, can the sale of the pledgor's interest on judicial 

°^Vickers v. Battershall, 84 Hun lien is lost because the debt is barred, 

(N. Y.) 496, 32 N. Y. S. 314; Clark yet the courts will not aid the pledgor 

V. Henry, 2 Cowen (N. Y.) 324; to recover without paying his debt. 

Lucketts V. Townsend, 3 Tex. 119, 49 Puckhaber v. Henry, 152 Cal. 419, 93 

Am. Dec. 723; Peugh v. Davis, 96 Pac. 114, 125 Am. St. 75, 14 Am. & 

U. S. 332, 24 L. ed. 775. Eng. Ann, Cas. 844. 

'^ Beatty v. Sylvester, 3 Nev. 228. '° White River Sav. Bank v. Cap- 

='Van Zile Bailments (2d ed.), § ital Sav. Bank &c. Co., 77 Vt. 123, 
280; Story Bailments (9th ed.), § 59 Atl. 197, 107 Am. St. 754. 
346; Cross v. Eureka L. & Y. Canal "Jennings v. Mcllroy, 42 Ark. 236, 
Co., 73 Cal. 302, 14 Pac. 885, 2 Am. 48 Am. Rep. 61 ; Treadwell v. Davis, 
St. 808; Hancock v. Franklin Ins. 34 Cal. 601, 94 Am. Dec. 770; Wins- 
Co., 114 Mass. 155; Wheeler v. Bres- low v. Fletcher, 53 Conn. 390, 4 Atl. 
lin, 47 Misc. (N. Y.) 507, 95 N. Y. 250, 55 Am. Rep. 122n; Hall v. Page, 
S. 966 ; Whelan's Exr. v. Kingsley's 4 Ga. 428, 48 Am. Dec. 235 ; Soule v. 
Admr., 26 Ohio St. 131. White, 14 Maine 436; Badlam v. 

"Note, 95 Am. St. 662; Conway v. Tucker, 1 Pick. (Mass.) 389, 11 Am. 

Caswell, 121 Ga. 254, 48 S. E. 956, Dec. 202; Wilkes v. Ferris, 5 Johns. 

2 Am. & Eng. Ann. Cas. 269; Jones (N. Y.) 335, 48 Am. Rep. 61. 

v. Merchants' Bank, 6 Rob. (N. Y.) "'See Hale Bailments, p. 130. 
162. Even if by statute the pledgee's 



§ 3051 BAILMENTS. 294 

process divest or diminish the interest of the pledgee, for the 
creditor can take no greater right than the pledgor had.°° 

§ 3051. Termination of the relation by the pledgor. — The 

normal termination of a pledge relationship is through the per- 
formance by the pledgor of the obligation secured. Payment 
of the debt secured and expenses incurred will discharge the 
lien.*'" Or if the pledgee sues on the debt, and it is satisfied by 
the sale upon execution of other property, the property is re- 
leased." If the pledgor tenders the proper amount, which the 
pledgee refuses to accept, this is a sufficient performance, and 
it is not necessary to keep the tender good, or pay the money 
into court, as in satisfying a debt, and the wrongful refusal of 
the pledgee to accept payment is a conversion, and makes him 
liable absolutely for the pledge,''^ though he does not lose his 
right to collect the debt secured."^ The pledgor's default gives 
the pledgee a right to consider the relationship ended, and to 
proceed to his remedy by sale.''* But he may elect to retain the 
pledge until the debt is paid, and continue the contract in force, 
and ordinarily the pledgor can not prevent this,''^ though it has 
been held that where goods are likely to perish or depreciate 
greatly in value, the pledgor by a bill in equity may compel their 
sale.*" 

§ 3052. Termination by consent of parties or operation of 
law. — The parties may terminate the relation at any time by 
mutual agreement. The destruction of the chattel pledged works 

'"Briggs V. Walker, 21 N. H. 72. ''Ball v. Stanley, 5 Yerg. (Tenn.) 

""Van Zile Bailments (2d ed.), § 199, 26 Am. Dec. 263. 

293; Hale Bailments, § 36, p. 173; "Van Zile Bailments (2d ed.), § 

Goddard Bailments, § 96 ; Clark Con- 295 ; Goddard Bailments, § 97 ; Schou- 

tracts (1894), 629 et seq. See Merrill ler Bailments (3d ed.), § 244. 

V. Hodgkins, 134 N. Y. S. 166. == Rozet v. McClellan, 48 111. 345, 95 

"Hale Bailments, p. 173. Am. Dec. 551; Robinson v. Hurley, 11 

" Loughborough v. McNevin, 74 Iowa 410, 79 Am. Dec. 497. 

Cal. 250, 14 Pac. 369, 5 Am. St. 435; ""In the case of National Exch. 

Norton v. Baxter, 41 Minn. 146, 42 Bank v. Kilpatric, 204 Mo. 119, 102 

N. W. 865, 4 L. R. A. 305, 16 Am. St. S. W. 499, 120 Am. St. 689, it was 

679; Moyer v. Leavitt, 82 Nebr. 310, held that a bank holding stock as 

117 N. W. 698, 130 Am. St. 682. See collateral which failed to sell it at par 

Desgroseillers v. Anderson, 36 Que. when ordered by the pledgor, must 

Super. Ct. 234, 18 Am. & Eng. Ann. bear the loss when the stock becomes 

Gas. 718. worthless. 



295 PLEDGES. § 3052 

by operation of law the termination of the relation/' but the 
death of one of the parties,"' or the pledgor's bankruptcy"" or 
any change in legal status has no such effect. The pledgee may, 
of course, at any time, by voluntarily redelivering the pledge for 
the purpose, terminate the pledge relationship.'" He may volun- 
tarily release it, take other security in its place, or release his 
rights. The release of the debt operates of course as a release 
of the pledge, but merely taking additional security or taking a 
new note will not terminate the pledge, unless the parties so in- 
tended.'^ A wrong of the pledgee which results in injury to the 
pledge, or any act of conversion terminates the pledge at the 
pledgor's option,'^ and so if the pledgor makes a tender of the 
debt secured, which the pledgee refuses to accept, the latter has 
lost his right to the pledge as security, but still has his right of 
action for the debt, though as to the pledge he is a wrongdoer, 
and has converted it to his own use.'^ Upon default by the 
pledgor, the pledgee may terminate the relationship by sale of the 
pledge, in a lawful manner, which will be considered in succeed- 
ing sections.'* The mere renewal of an obligation to pay money 
does not release or discharge securities deposited as collateral," 
and it is held that property pledged collaterally will be released 

' "Van Zile Bailments (2d ed.), § the pledge is lost by the subsequent 

328; Goddard Bailments, § 95. substitution for it of other property 

"^ Warrior Coal &c. Co. v. Nat. of like character. Swedish- American 

Bank (Ala.), S3 So. '^l ; Hoare v. Nat. Bank v. First Nat. Bank, 89 

Parker, 2 T. R. 376 (unless the Minn. 98, 94 N. W. 218, 99 Am. St. 

pledgor had only a life interest in the S49. 
property). "Goddard Bailments, § 107; Story 

™Bell V. Hanover Nat. Bank, 57 Bailments (9th ed.), §§ 360, 365; 

Fed. 821; Dowler v. Cushwa, 27 Md. Schouler Bailments (3d ed.), § 263. 

354; Yeatman v. Savings Inst, 95 The taking of the note of a third 

U. S. 764, 24 L. ed. 589; Jerome v. person for the amount of an overdue 

McCarter,' 94 U. S. 734, 24 L. ed. note, with such note as collateral 

13g ' thereto, may release property held as 

"Treadwell v Davis, 34 Cal. 601, collateral for the overdue note. Lin- 

94 Am. Dec. 770; Collins v. Buck, 63 coin v. Nat. Met. Bank, 35 App, (D. 

Maine 459; Jarvis v. Rogers, 15 Mass. C.) 362, 30 L. R. A. (N. S.) 1215. 
389- First Nat. Bank v. Bradshaw "Whitlock v. Heard, 13 Ala. lib, 

(Nebr ) 135 N W. 830, 39 L. R. A. 48 Am. Dec. 1Z. See cases cited un- 

(N. S.)'886; Black v. Bogert, 65 N. der § 3046, 

Y. 601 • Grinnell v. Cook, 3 Hill (N. " See cases cited under note 63. 
Y.) 485, 38 Am. Dec. 663; Fletcher v. '* See § 3054 et seq. 
Howard, 2 Aikens (Vt.) 115, 16 Am. "First Nat. Bank v. Gunhus 133 

Dec. 686. A pledge of property sit- Iowa 409, 110 N. W. 611, 9 L. R. A. 

uated in a warehouse is restricted to (N. S.) 471. 
the identical property pledged, and 



§ 3053 BAILMENTS. 296 

under the same circumstances that a surety who is personalh- 
bound would be.^" 

§ 3053. Redelivery. — The pledgee is under the same duly 
to redeliver as any other bailee, and when the pledge is redeemed, 
he must return the article pledged, together with all its increase 
and profits.'^ He must return the identical property received,"* 
except that in the case of certificates of stock he may return other 
certificates of precisely similar character.'" 

§ 3054. Pledgee's remedies upon pledgor's default. — Upon 
default in his obligation by the pledgor, the pledgee may either 
sue upon the debt, in which instance he retains his lien upon the 
pledge until the satisfaction of the debt secured by the payment 
of the judgment, or exercise his power of sale of the property at 
common law, upon notice to the pledgor, by a proceeding in 
equity, tmder a special power given by special contract, or under 
a power given by statute.*" 

§ 3055. Suit on the debt. — The holding of a pledge as se- 
curity for a debt does not prevent a suit on the debt, and the 
pledgee may sue on the debt while retaining the pledge as se- 
curity, and may hold the pledge until the judgment obtained in 
the suit is satisfied, for the pledge is good until the debt is satis- 
fied,*^ and it is held that the debt is not extinguished by being 
merged in the judginent to such an extent as to release the 
pledge.*^ Even though the pledgor has tendered the amount of 

'° Daviess County Bank & Trust Co. 162, § 33; Van Zile Bailments (2it 

V. Wright, 33 Kv. L. 457, 110 S. W. ed.), § 296; Goddard Bailments, §98; 

351, 17 L. R. A. (N. S.) 1122. White River Sav. Banl< v. Capital 

"Schouler Bailments (3d ed.), § Sav. Bank, 77 Vt. 123, 107 Am. St. 

259; American Pig Iron Co. v. Ger- 754; note, 73 Am. St. 566. But a 

man, 126 Ala. 194, 28 So. 603, 85 Am. statutory provision for notice and 

St. 21 ; Stearns v. Marsh, 4 Denio public sale, being for the benefit of 

(N. y.) 227, 47 Am. Dec. 248; Dean the pledgor, may be waived by the 

V. Lawham, 7 Ore. 422 pledgor. Ardmore State Bank v. 

"Bryson v. Rayner, 25 Md. 424, 90 Mason, 30 Okla. 568, 120 Pac. 1080. 

Am. Dec. 69 ; Ball v. Stanley. 5 Yerg. " See cases cited in note 82. Slcud v. 

(Tenn.) 199, 26 Am. Dec. 263. TiHinghast, 195 Fed. 1; De Cordova 

"Atkins v, Gamble, 42 Cal. 86, 10 v. Barnum, 130 N. Y. 615, 29 N. E. 

Am. Rep. 282; Worthington v. Tor- 1099, 27 Am. St. 538. 

mey, 34 Md. 182; Gruman v. Smith, ^ Black v. Reno, 59 Fed. 917; Har- 

81 N. Y. 25; Gilpin v. Howell, 5 Pa. ding v. Hawkins, 141 111. 572, 31 N. 

St. 41, 45 Am. Dec. 720. E. 307, 33 Am. St. 347; Jones v. 

«°See § 3055-9. Hale Bailments, p. 



297 PLEDGES. § 3056 

the debt, and this has been refused, the pledgee still has his 
remedy upon the debt, though he has lost his lien upon the 
pledge/^ If the pledgee in his suit upon the debt attaches the 
pledged property, or levies an execution upon it, he is held to 
have waived the lien of the pledge, since he has by the levy ad- 
mitted that the property is in the possession of the pledgor sub- 
ject to execution, or attachment, and thus he is estopped from 
setting up in himself a right to its possession.** The pledgor, 
when sued on the pledge debt, cannot set off the value of the 
pledge at common law*° unless it has been converted,*" but in sev- 
eral states the pledgee who sues on the debt must produce the 
pledge or be liable for its value, at the time of trial.*' 

§ 3056. Common-law sale of the pledge. — Upon default by 
the pledgor, the pledgee may make a demand for payment, and 
if he fails to comply, the pledgee may then, after reasonable no- 
tice to the pledgor of the time and place of the sale, sell the 
property pledged at public auction.** Notice is necessary because 
the pledgor has the right to redeem at any time before the sale, 
and also in order that he may see that the sale is conducted 
fairly, and may find prospective purchasers to make the price 
better, and the pledgee cannot lawfully sell without giving no- 
tice,*" unless the debtor is informed of the time and place of the 

Scott, 10 Kans. 33; Smith v. Strout, Bank of British Columbia v. Mar- 

63 Maine 20S; Wallace v. Finnegan, shall, 8 Sawy. (U. S.) 29, 11 Fed. 19; 

14 Mich. 170, 90 Am. Dec. 243; Bigelow & Co. v. Walker, 24 Vt. 149, 

note, 73 Am. St. 567; contra, Ameri- 58 Am. Dec. 156. 

can Bonding Co. v. Loeb, 50 Wash. " See cases cited in note preced- 

104, 96 Pac. 692, 126 Am. St. 891. ing. Ocean Nat. Bank v. Faut, 50 N. 

Totts V. Plaisted, 30 Mich. 149; Y. 474; Stuart v. Bigler's Assignees, 

Norton v. Baxter, 41 Minn. 146, 42 98 Pa. St. 80. 

N. W. 865, 4 L. R. A. 305 and note, »*Mauge v. Heringhi, 26 Cal. 577; 

16 Am. St. 679; Kortright v. Cady, McDowell v. Chicago Steel Works, 

21 N. Y. 328, 17 Am. Dec. 145 ; cases 124 111. 491, 16 N. E. 854, 7 Am. St. 

cited in note 152. 381 ; Sell v. Ward, 81 111. App. 675 ; 

"Leggv. Willard, 17 Pick. (Mass.) Robinson v. Hurley, 11 Iowa 410, 79 

140, 28 Am. Dec. 282 ; Buck v. Inger- Am. Dec. 497 ; In re Jeane's Appeal, 

soil, 11 Mete. (Mass.) 226; contra, 116 Pa. St. 573, 11 Atl. 862, 2 Am. 

Arendale V. Morgan, S Sneed (Tenn.) St. 624; Toronto Gen. Trusts Corp. 

703. V. Cent. Ontario R. Co., 10 Ont. L. 

^Winthrop Sav. Bank v. Jackson, R. 347, 4 Ann Cas. 1163 and cases 

67 Maine 570, 24 Am. Rep. 56. cited in note. 

"Stearns v. Marsh, 4 Denio (N. '"McDowell v. Chicago Steel 

Y) 227, 47 Am. Dec. 248; Cass v. Works, 124 111. 491, 16 N. E. 854, 

Higenbotam, 27 Hun (N. Y.) 406, 7 Am. St. 381; MiUiken v. Dehon, 27 

revd. 100 N. Y. 248, 3 N. E. 189; N. Y. 364; In re Jeane's Appeal, 116 



§ 3057 



BAILMENTS. 



298 



sale from other sources, and then notice is unnecessary,'" since 
actual notice is all that the law requires. The rule is that the 
pledgee has not the right to purchase at his own sale, and if he 
does, the sale is voidable at the option of the pledgor."^ If he 
avoids the sale the pledge is in the same condition as before, the 
pledgee still holding his lien for the debt secured."^ The pledgee 
must exercise the utmost good faith in the sale, and must hold 
it at a reasonable time, and at a proper place. "^ As to any sur- 
plus of the proceeds of the sale of the pledged property, over the 
amount of the debt secured, the pledgee is a trustee for the 
pledgor."" If notice cannot be given to the pledgor because he 
cannot be found, a judicial sentence is necessary to a valid sale 
by the pledgee."" If the sale is legally and fairly conducted, in- 
adequacy of price is not a ground for setting it aside."" 

§ 3057. Sale in equity. — The pledgee who has an adequate 
remedy at law is not entitled to go into equity, and it seems that 



Pa. St. 573, 11 Atl. 862, 2 Am. St. 
624. But see as to waiver by 
pledgor, Ardmore State Bank v. 
Mason, 30 Okla. 568, 120 Pac. 1080. 

""Jones on Pledges, § 613; Alex- 
andria L. & H. R. Co. V. Burke, 22 
Grat. (Va.) 254, 

"^Hill V. Finigan, 77 Cal. 267, 19 
Pac. 494, 11 Am. St. 279n ; Winchester 
V. Joslyn, 31 Colo. 220, 72 Pac. 1079, 
102 Am. St, 30; Glidden v. Mechanics 
Nat. Bank, 53 Ohio St. 588, 42 N. E. 
995, 43 L. R. A. Ill and note; 
Thomas v. Gilbert, 55 Ore. 14, 101 
Pac. 393, 104 Pac. 888; Ann. Cas. 
1912A. 516 and note. See Holston 
Bank v. Wood (Tenn.), 140 S. 
W. 31, where it was held that the 
pledgor may not hold liable for con- 
version the pledgee who purchases 
collateral at his own sale, but who 
retains possession and does not re- 
fuse to return them upon tender of 
amount of the debt. 

°^ Farmers Loan &c. Co, v. Toledo 
&c. R. Co., 54 Fed, 759; Stokes v. 
Frazier, 72 111. 428 ; Bank of Old Do- 
minion V. Dubuque &c. R. Co., 8 
Iowa 277, 74 Am. Dec. 302; Bryson 
V. Rayner, 25 Md, 424, 90 Am. Dec. 
69; Bryan v. Baldwin, 52 N. Y. 232; 
Glidden v. Mechanics' Nat. Bank, 53 



Ohio St. 588, 42 N. E. 995, 43 L. R. 
A. 1?,1. 

"^ Guinzburg v. H. W. Downs Co., 
165 Mass. 467, 43 N. E. 195, 52 Am. 
St. 525; Hagan v. Nat. Bank, 182 
Mo, 319, 81 S, W. 171 ; King v. Texas 
Banking & Ins. Co., 58 Tex. 669. 

"■'Jones Pledges, §§ 649, 650; Tay- 
lor V. Turner, 87 111. 296; Miles v. 
Walther, 3 Mo. App. 96; Foster v. 
Berg & Co., 104 Pa. St. 324. Where 
a pledgee who foreclosed a mortgage 
purchased the property to prevent 
sacrifice, under a power given in the 
mortgage, but was not authorized by 
the pledge contract to purchase at 
his own sale, he Iiolds as the trustee 
for the pledgor, subject to his right 
to redeem. Union Trust Co. v. Has- 
seltine, 200 Mass. 414, 86 N. E. Ill, 
16 Ann. Cas. 123. 

"'' Indiana &c. R. Co. v. McKernan, 
24 Ind. 62 ; Garlick v. James, 12 Johns. 
(N. Y.) 146, 7 Am, Dec, 294n; 
Stearns v. Marsh, 4 Denio (N. Y.) 
227, 47 Am. Dec. 248. 

°° Farmers' Nat. Bank v. Venner, 
192 Mass. 531, 78 N. E. 540, 7 Ann. 
Cas. 690. Nor the fact that but one 
bidder attended. Guinzburg v. H. W. 
Downs Co., 165 Mass. 467, 43 N. E. 
195, 52 Am. St. 525. 



299 PLEDGES. § 3058 

only where there is an accounting necessary/' or where there 
are conflicting claims or intervening rights to the property,"' or 
where the pledgor cannot be personally notified,"* is the pledgee 
entitled to bring a bill in equity, and obtain a decree for the sale 
of the property. 

§ 3058. Sale under statute. — In most of the states the fore- 
closure of a pledge and its sale is regulated by statute. In some 
of these states any other method of sale is forbidden, in others 
sale at common law, or under a special power given by contract, 
is permitted as well as the statutory sale. It is sufficient to say 
here that before foreclosing any pledge, the statutes of the state 
where the foreclosure is sought should be examined. 

§ 3059. Sale under the provisions of a special contract. — 

The parties may agree upon the power of the pledgee to sell the 
pledge upon default, upon such conditions as they see fit, so long 
as they are not illegal, or unconscionable. Thus if permitted by 
contract the sale may be held privately, demand and notice may 
be omitted, the pledgee may purchase at the sale, or the pledgee's 
liability may be increased,^ but a provision in the pledge contract 
that the pledgee shall become absolute owner upon default is un- 
enforcible,^ this being perhaps the only strict limitation upon the 

" Durant v. Einstein, 35 How. Prac. cured by a pledge of collateral, giv- 

(N. Y.) 223, 5 Rob. (N. Y.) 423; ing the holder the right to make 

In re Conyngham's Appeal, 57 Pa. such use of the collateral as he may 

St. 474. desire, so that he returns to the 

'' American Pig Iron Co. v. Ger- pledgor collateral of the same amount 

man, 126 Ala. 194, 28 So. 603, 85 Am. and kind, gives him no right to sell 

St. 21; Horner v. Savings Bank, 7 and end the pledgor's rights, before 

Conn. 478 ; Robinson v. Hurley, 11 default in payments on the note. 

Iowa 410, 79 Am. Dec. 497n; Boyn- Commonwealth v. Atlhause, 207 

ton V. Payrow, 67 Maine 587; Cleg- Mass. 32, 93 N. E. 202, 31 L. R. A. 

horn v. Minnesota Title Co., 57 Minn. (N. S.) 999n. 

341, 59 N. W. 320, 47 Am. St. 615. ' New York L. Ins. Co. v. Curry, 

•°See cases cited under note 95. 115 Ky. 180, 72 S. W. 736, 103 Am. 

^Schouler Bailments (3d ed.), §§ St. 297. See Darrill v. Eaton, 35 

225, 249; Farmers' National Bank v. Mich. 302. It was held in Kentucky 

Venner, 192 Mass. 531, 78 N. E. 540, that one may not assign a paid-up 

7 Ann. Cas. 690; Cooper v. Simpson, insurance policy to the insurance 

41 Minn. 46, 42 N. W. 601, 4 L. R. company as collateral for a loan and 

A. 194, 16 Am. St. 667 ; Palmer v. give it the right to forfeit the policy, 

Mutual L. Ins. Co., 114 Minn. 1, 130 or cancel it upon default (Mutual L. 

N. W. 250. In re Jeane's Appeal, 116 Ins, Co. v. Twyman, 122 Ky. 513, 92 

Pa. St. 573, 11 Atl. 862, 2 Am. St. S. W. 335,, 121 Am. St. 471) but that 

624. A provision in a note se- he may surrender it at its cash value 



§ 3060 BAILMENTS. 



^OO 



power of the parties to contract that the sale shall be carried out 
in any manner they see fit. 

§ 3060. Further of pledgee's rights in case of default — 
Where pledge is a chose in action, or corporate stock. — The 

rule is that where the pledge is divisible, the pledgee can sell 
no more than enough to satisfy his debt, or the sale may be 
avoided by the pledgor.^ It is also the pledgee's duty to try to 
realize the most possible for the pledgor by the sale, and if the 
property would bring more divided and sold in separate parcels 
or lots than if sold altogether, it is his duty so to sell it."* Default 
by the pledgor of a negotiable instrument does not authorize 
the pledgee to sell it, in the absence of special contract, but his 
remedy is to hold it and collect it as it becomes due, applying the 
proceeds upon the pledge debt.^ As was said in a preceding sec- 
tion, the pledgee of negotiable instruments is held to due dili- 
gence in collecting them, and when they become due, is entitled 
to maintain an action upon them, whether or not the pledge debt 
is due." He has no right to compromise upon negotiable securi- 
ties by accepting a less amount than is due, and the general rule 
is that if he does he is liable to the pledgor for the difference 
between the amount accepted and the face of the security,^ though 
a compromise may be upheld in a case where the maker is insol- 
vent, and it was for the best interest of the pledgor as well as the 
pledgee.' It has been held proper to sell stocks and bonds on the 

in payment. Crice v. Illinois L. Ins. ° See § 3044. Joliet Iron &c. Co. v. 

Co., 122 Ky. 572, 92 S. W. 560, 121 Scioto Fire Brick Co., 82 111. 548, 25 

Am. St. 489. Am. Rep. 341; Slevin v. Morrow, 4 

' Fitzgerald v. Blocher, 32 Ark. 742, Ind. 425 ; Hazard v. Wells, 2 Abb. 

29 Am. Rep. 3. N. Cas. (N. Y.) 444. 

'Hale Bailments, p. 169; Fitzgerald ' Zimpleman v. Veeder, 98 111. 613; 

V. Blocher, 72 Ark. 742, 29 Am. Rep. Union Trust Co. v. Rigdon, 93 111. 

3; Howard v. Ames, 3 Mete. (Mass.) 458; Wood v. Mathews, 73 Mo. 477; 

308. Fairbanks v. Sargent, 117 N. Y. 320, 

■> Joliet Iron Co. v. Scioto Fire 22 N. E. 1039, 6 L. R. A. 475. 

Brick Co., 82 111. 548, 25 Am. Rep. 'Story Bailments (9th ed), § 214; 

341 ; Wheeler v. Newbould, 16 N. Y. Bowman v. Wood, 15 Mass. 534 ; Ex- 

392. See Moses Exr. v. Grainger, 106 eter Bank v. Gordon, 8 N. H. 66 ; 

Tenn. 7, 58 S. W. 1067, S3 L. R. A. Garlick v. James, 12 Johns. (N. Y.) 

857n, and full note; also note 4 L. 146, 7 Am. Dec. 294. And if all the 

R. A. 587. As to recovery of full collateral is insufficient to satisfy the 

amount of note by pledgee, see Gold debt, the pledgor cannot complain of 

Glen &c. Co. v. Dennis (Colo. App.), a compromise made by the pledgee. 

121 Pac. 677, and Slack v. Elkins Zollman v. Jackson Trust & Savings 
(Ga. App.), 72 S. E. 862. 



30I PLEDGES. § 3061 

stock exchange after the custom of brokers, rather than by special 
pubHc sale." Where brokers, upon the advancement of an agreed 
amount by their customers, called a margin, advance the re- 
mainder of the purchase-price, they are considered to hold the 
stocks in pledge for the amount advanced, and they may fore- 
close their liens according to the customs, rules and usages of 
brokers upon reasonable notice to the customer, and the allowr- 
ance to him of reasonable time in which to pay the margins de- 
manded." Custom has brought about a certain departure from 
the rules of law recognized in other pledges in the case of stocks 
purchased on margins. 

§ 3061. Pledgor's rights in case of default, or in case of 
pledgee's wrong. — The pledgor has the right to redeem at 
any time after default until sale by the pledgee.^^ He has a right 
to a fair and impartial sale by the latter, and may avoid a sale 
which is notoriously unfair, or one where no demand for pay- 
ment was made, or where he had no notice of its time and 
place. ^^ The general rule is that he has no right to compel a sale 
of the pledge by the pledgee after default, even if the market 
/Should be falling, for it is said that his rights are sufficiently 
guarded by the privilege of redeeming, or of selling his equity 
of redemption. ^^ He is entitled to any surplus of the proceeds 

Bank, 238 111. 290, 87 N. E. 297, 32 "Van Zile Bailments (2d ed.), 

L. R. A. (N. S.) 8S8n. § 323; Milliken v. Dehon, 27 N. Y. 

"Denton v. Jackson, 106 111. 433; 364, revg. 23 N. Y. Super. Ct. 325. 
Worthington v. Tormey, 34 Md. 182; "^Hamilton v. State Bank, 22 Iowa 

Gruman v. Smith, 81 N. Y. 25. 306; Galigher v. Jones, 129 U. S. 193, 

"See cases cited in note 9; Van 9 Sup. Ct. 335, 32 L. ed. 658. See 

Zile Bailments (2d ed.), §§ 320-22; cases cited in notes 89 and 90. Vol- 

note 74 Am. St. 471-4. But if the untary and unconditional surrender 

broker sells the stock without notice of the pledged property to the pledg- 

to the customer of the time and place or usually operates as a waiver or 

of the sale, it is a conversion. Con- loss of the pledge. First Nat. Bank v. 

tent V. Banner, 184 N. Y. 121, 6 Am. Bradshaw (Nebr.), 135 N. W. 830, 39 

& Eng. Ann. Cas. 106; Gillett v. L. R. A. (N. S.) 887 and note. 
Whiting, 120 N. Y. 402, 24 N. E. " This applies where the pledgee of 

790; Baker v. Drake, 66 N. Y. 518, corporate stock allowed it to depre- 

23 Am. Rep. 80. A broker who car- date in value. Jones Pledges, § 606n ; 

ries stock on a margin for a cus- Lake v. Little Rock Trust Co., 11 

tomer may pledge it for his own pur- Ark. 53, 90 S. W. 847, 3 L. R. A. 

poses to the extent of the amount of (N. S.) 1199 and note, 7 Am. & Eng. 

his advances. Clark v. Baillie, 45 Ann. Cas. 394; Rozet v. McClellan 

Can. Sup. Ct. SO, Ann. Cas. 1912B. 548 48 111. 345, 95 Am. Dec. 551 ; Taggard 

and note. v. Curtenius, 15 Wend. (N. Y.) 155, 

but see cases cited in note 66, § 3031.' 



§ 3062 BAILMENTS. 3O2 

of the sale of the pledge, after the pledge debt is satisfied." The 
pledgor may waive any irregularity in the sale or other proceed- 
ings of the pledgee.^' If the bailee has been guilty of a misuse 
of the property, or of some act which would terminate the lien, 
the pledgor has a right of action for conversion." 

§ 3062. Rights of purchaser at pledgee's sale, — The gen- 
eral rule is that a legal sale after default by the pledgee divests 
the title of the pledgor, and puts in the purchaser a good and 
valid title to the property pledged, for the pledgee sells not only 
his own interest, but all the right of the pledgor, which he could 
have given him power to sell at the time the pledge contract was 
made.^^ As we have seen, the pledgee before default can assign 
only his own interest, subject to the rights of the pledgor under the 
pledge contract, and the purchaser from the pledgee before the 
pledgor's default gets the same right as the pledgee held." And 
if the sale after default was not made in accordance with law, it 
is held that the purchaser takes the pledgee's right, and the 
pledgor may not recover without paying to him the debt.^" 

" See cases cited in note 94. White " Halliday v. Stewart County Bank, 

River Sav. Bank v. Capital Sav. Bank, 112 Ga. 461; Rozet v. McClellan, 48 

n Vt. 123 59 Atl, 197, 107 Am. St. 111. 34S, 95 Am. Dec. 551; Potter v. 

754 ; note 83 Am. St. 392. Thompson, 10 R. I. 1. 

^ Hill V. Finigan, Tl Cal. 267, 19 " See cases cited under § 3045. 

Pac 494 11 Am St. 279. "Brittan v. Oakland Bank of Sav- 

" See cases cited under § 3046. ings, 124 Cal. 282, 57 Pac. 84, 71 Am. 

Feiee v. Burt, 118 Mich. 243, 74 Am. St. 58; McNeil v. Tenth Nat. Bank, 

St 390. 46 N. Y. 325, 7 Am. Rep. 341. 



CHAPTER LXXI. 

CONTRACTS OF HIRING. 

§ 3070. Contracts of hiring. § 3077. Third persons and subusers. 

3071. Contracts of hiring the use of 3078. Assignabihty of bailee's rights. 

a thing. 3079. Special classes of hiring the 

3072. Creation of the relation. use of a thing — Property 

3073. Bailor's duties and rights — for exhibition. 

Warranty of title and dis- 3080. Special classes — Storekeeper 
closure of defects. or bath-house keeper as 

3074. Bailee's right to possession hired bailee of personal be- 

and use. longings of customer or 

3075. Care demanded of hirer — Ex- patron. 

penses. 3081. Termination of the contract of 

3076. Bailee's misuse and conver- hiring — RedeHvery and rec- 

sion. ompense. 

§ 3070. Contracts of hiring. — In our general classification 
of contracts of hiring as one of the kinds of bailments for mutual 
benefit, four subclasses were recognized; namely, the hiring of 
the use of a thing; the hiring of services about a thing; the hir- 
ing of the custody of a thing; and the hiring of the carriage of 
a thing. The general principles of bailments apply fully to such 
contracts, and the distinguishing feature is that the bailment is 
for mutual benefit, and the bailee is held only to ordinary care of 
the article bailed. This statement must be qualified, however, as to 
the liability of common carriers and innkeepers, whose bailment is 
a bailment of hiring, and of mutual benefit, and who are yet, for 
reasons of public policy, held to a more than ordinary degree of 
care for the thing bailed. Their obligations will be treated sepa- 
rately. The other contracts of hiring afford perhaps the best 
example of the pure bailment, and the most of the examples cited 
to illustrate the general principles of the law of bailments were 
taken from contracts of hiring. Bailments for hire as a rule 
rest upon contract, but there are a few quasi bailments for hire, 
which arise by operation of law, as where property comes into the 
possession of captors, revenue officers, prize agents, officers of 
courts, or salvors, all of whom are considered depositaries for 

303 



§ 3071 BAILMENTS. 3O4 

hire.^ Contracts of hiring are the locatio-conductio bailments 
of the civil law, and a letting of a thing by one party, and a hir- 
ing of it by the other, are elements present in all bailments of this 
class. 

§ 3071. Contracts of hiring the use of a thing. — The let- 
ting for a recompense of a chattel to be used by the hirer is the 
locatio rei of the Roman law. Any chattel which will not be 
consumed in the use may be hired. The compensation for the 
hiring is made to the bailee, and, though usually money, may be 
goods, services or any benefit, and in some cases the benefit is 
very indirect. The legal presumption is that the use of another's 
chattel is for some reward to be returned to him.^ The locatio 
rei bailment differs from the commodate only in the element of 
compensation to the bailee, who thus becomes a letter instead of 
a lender, and in regard to many of the rights of the parties, espe- 
cially as to conversion by the bailee, the rules are substantially 
the same. Common instances of this class of bailments are the 
hiring of a horse by a teamster or farmer, the hiring of a horse 
and carriage from a livery stable, or the hiring of a piece of ma- 
chinery. It is held that one who leases moving-picture films for 
use is a bailee and bound to use only ordinary care for their 
preservation.^ Exceptional instances of this class of bailment are 
the receiving of property for exhibition, which is held to be a bail- 
ment for hire, and the care of the effects of the customers of 
clothing merchants, as an incident of a business conducted for 
profit.* 

^Captors, Story Bailments (9th ments (9th ed.), § 622; Schiller, 

ed.), § 614; The Betsey, 1 W. Rob. Cargo Ex., 2 Prob. Div. 145; Schou- 

Adm. 93; The Anne, 3 Wheat. (U. ler Bailments (3d ed.), § 94. 

S.) 435, 4 L. ed. 428; The George, ' Goddard Bailments, § 112. Where 

1 Mason (U. S.) 24; revenue oifi- one delivered a horse to another, who 

cars, Burke v. Trevitt, 1 Mason ( U. was to break her to work, and pay 

S.) 96; prize agents, Story Bailments no compensation for her services, the 

(9th ed.), § 619; The Rendsberg, 6 court held that the bailment was one 

C. Rob. Adm. 142; officers of courts, of hire, the bailor's compensation for 

Story Bailments (9th ed.), §§ 124- the use of the horse being the benefit 

135, 620, 621 ; Burke v. Kimball, 106 of having the horse broken, and the 

Mass. 115; Trotter v. White, 26 bailee receiving the benefit of the 

Miss. 88; Cross v. Brown, 41 N. H. use of the horse. Francis v. Shrader, 

283; Brownin- v. Hanford, 5 Hill 67 111. 272, 

(N. Y.) 588, 40 Am. Dec. 369; Burke "Miller v. INIiloslowsky (Iowa), 133 

V. Trevitt, 1 Mason (U. S.) 96, Fed. N. W. 357. 

Cas. No. 2163; salvors. Story Bail- "See §§ 3079, 3080, infra. 



305 CONTRACTS OF HIRING. § 3O72 

§ 3072. Creation of the relation. — This relation is one of 
contract, arising from an express or implied contract, and of 
course the general rules of contracts apply as to the sufficiency of 
the consideration, the capacity of the parties, and the avoidance 
of a contract entered into through fraud or duress. Since the 
contract is of mutual benefit, either party may compel the other 
to perform his part, or respond in damages. The contract is 
merely executory until delivery by the bailor to the bailee and 
acceptance by the latter, wrhen the bailment relationship com- 
mences.' Ordinarily, the rights of the parties are determined by 
the contract entered into, for any express contract, not contrary 
to public policy or law, will be enforced, and the parties may 
agree to any limitations within these restrictions as to the time, 
place and manner of the use of the chattel, and the bailee may 
contract to insure its safe return." 

§ 3073. Bailor's duties and rights — Warranty of title, and 
disclosure of defects. — The bailor is a warrantor that he has 
such a possessory right to the chattel let as to enable the bailee 
to carry out the purposes of the bailment.^ Within this qualifica- 
tion it is not necessary that he should be the owner or have abso- 
lute title, but if the bailee is prevented from carrying out the pur- 
poses of the contract, and is deprived of the contemplated use of 
the thing because of the intervention of a title superior to the 
bailor's, he may bring an action for the loss caused by such fail- 
ure of title.^ The bailor warrants that, so far as he knows, or in 
the exercise of ordinary care could know, the chattel is fit for the 
purpose of the bailment, and that its use for such purposes will 
not be dangerous, if ordinary care is exercised. He must notify 
the bailee of defects in the article bailed, but is not liable for in- 

"Van Zile Bailments (2d ed.). § ty his failure to perform his part of 

120. In an interesting case recently the contract. Browning v. Fies 

decided, it was held that the livery (Ala.), 58 So. 931. 

stable keeper who contracted to fur- °See Hale Bailments (1896), § 41, 

nish a carriage and team to carry a p. 185. 

wedding party from the bridegroom's ' Schouler Bailments (3d ed.), § 
residence to the church, and who 151; Story Bailments (9th ed.), §§ 
failed to appear at the time, was 383, 387; Van Zile Bailments (2d ed.), 
liable in breach of contract for the § 121; Hale Bailments, p. 199; God- 
annoyance, inconvenience, mental dard Bailments, § 113. 
harassment and mental pain caused *See citations in note 7. 

20— Contracts, Vol. 4 



§ 3'->74 BAILMENTS. 306 

juries caused by defects of which he did not know, and could not 
know in the exercise of reasonable diligence," and is only liable 
for negligence. So if the defect is latent, and could not have 
been discovered by careful examination, the bailor cannot be 
held,^" and if the bailee had actual notice of the defect, the bailor 
is not liable for his injuries obtained after such notice." The 
degree of diligence to be exercised depends upon the circum- 
stances, and where the use contemplated might endanger the 
safety or life of others, the letter is held to a high degree of dili- 
gence, and the most watchful care, as in the case of livery stable 
keepers, who make a business of letting horses and carriages. 
So, "a liveryman is bound to exercise the care of a reasonably 
prudent man to furnish a horse or carriage that is fit and suitable 
for the purpose contemplated in the hiring,"^^ and if a liveryman 
lets a horse which he knows, or in the exercise of reasonable care 
could have known, to be dangerous and unsuitable for the service 
for which it is required, he is liable for injuries caused by its 
vicious propensities.^^ 

§ 3074. Bailee's right to possession and use. — As in all 
bailments, the bailee has the right of possession pending the ac- 
complishment of the bailment purpose. Since in this case that 
purpose is the use of the chattel bailed, the bailee has the right 
to the exclusive use and control of the thing for the purpose for 
which it was hired, as against all the world, including the letter,^* 

'Higman v. Caraody, 112 Ala. 267, 1S4, 73 Atl. 324, 25 L. R. A. (N. S.) 

20 So. 480, 57 Am. St. 33; Leach v. 372, 132 Am. St. 770. See Payne v. 

French, 69 Maine 389, 31 Am. Rep. Halstead, 44 111. App. 97; Nisbet v. 

296; Moriarty v. Porter, 22 Misc. (N. Wells, 25 Ky. L. 511, 76 S. AV, 120; 

Y.) 536, 49 N. Y. S. 1107; Harring- Lynch v. Richardson, 163 Mass. 160, 

ton V. Snyder, 3 Barb. (N. Y.) 380; 39 N. E. 801, 47 Am. St. 444; Cope- 

Kissam v. Jones, 56 Hun (N. Y.) 432, land v. Draper, 157 Mass. 558, 32 N. 

31 N. Y. St. 198, 10 N. Y. S. 94. See E. 944, 19 L. R. A. 283, 34 Am. St. 

cases cited in notes 10, 11, 12, 13. 314; McGregor v. Gill, 114 Tenn. 

Baker & Lockwood Mfg. Co. v. 521, 86 S. W. 318, 108 Am. St. 919; 

Clavton. 40 Tex. Civ. App. 586, 90 Huntoon v. Trumbull, 12 Fed. 844, 

S. \y. 519, 2 McCrary (U. S.) 314. 

"Van Zile Bailments (2d ed.), § "^ See cases cited in note 12. 

123; Home v. Meakin, 115 Mass. " Story Bailments (9th ed.), § 395; 

326; Hadlev v. Cross, 34 Vt. 586, 80 Van Zile Bailments (2d ed.) § 122; 

Am. Dec. 699. Goddard Bailments, § 115; McCon- 

"^ Cutter V. Hamlen, 147 Mass. 471, nell v. ]\Iaxwe!l, 3 Blackf (Ind ) 

18 N. E. 397, 1 L. R. A. 429; God- 419, 26 Am. Dec. 428; Banfield v 

dard Bailments, § 113. Whipple, 10 Allen (Mass.) 27, 87 

"Conn V. Hunsberger, 224 Pa. Am. Dec. 618; Woodman v. Hub- 



307 CONTRACTS OF HIRING. § 3075 

or an attaching creditor of the letter," and this right is not lost 
by redelivery to the owner for a temporary purpose/" The 
bailee's right to use extends only to the purpose for which it was 
hired, and not to any other. The extent of his right is conse- 
quently mainly dependent upon the agreement between the par- 
ties, and he is held to good faith in carrying out this agreement. 

§ 3075. Care demanded of hirer — Expenses. — The bailee is 
held to ordinary diHgence in the care of the chattel, and lack of 
such diligence will be negHgence for which he is liable." What is 
ordinary diligence depends of course upon the character of the 
thing and the circumstances. The majority of the cases brought 
upon contracts for the hiring of the use of a thing are those in 
which a horse has been hired, and this subject affords the best 
illustration of the care to which the bailee is held. It was said 
by Mr. Schouler,^* "Unless the bailee took the animal for too 
short a time, or under a special arrangement whereby the bailor 
was to look after his own property, he ought to provide the crea- 
ture regularly with proper food and drink,^* afford due shelter 
and repose, and, in general, take reasonable heed that the animal, 
while resting, is so fastened up that it may not readily run away 
or be stolen.^" While putting the horse to active use he should 
not harness carelessly, overload,^^ overdrive,^^ be heedless of 

bard, 2S N. H. 67, 57 Am. Dec. 310; Nat. Bank, 119 N. Y. 263, 23 N. E. 

Beach v. Raritan &c. R. Co., 2>1 N. 875; Collins v. Bennett, 46 N. Y. 490; 

Y. 457; Cobb v. Wallace, 5 Cold. Millon v. Salisbury, 13 Johns. (N. Y.) 

(Tenn.) 539, 98 Am. Dec. 435; 211; Clark v. United States, 95 U. S. 

Hickok V. Buck, 22 Vt. 149. 539, 24 L. ed. 518, 13 Ct. CI. (U. S.) 

"Hartford v. Jackson, 11 N. H. 519; Gleason v. Beers' Estate, 59 Vt. 

145; Smith v. Niles, 20 Vt. 315, 49 581, 10 Atl. 86, 59 Am. Rep. 757; 

Am. Dec. 782. Baker & Lockwood Mfg. Co. v. Clay- 

" Roberts v. Wyatt, 2 Taunt. 268. ton, 46 Tex. Civ. App. 384, 103 S. 

"Story Bailments (9th ed.), §§ W. 197. 

398, 399; Schouler Bailments (3d "Schouler Bailments Including 

ed.), § 134; Higman v. Camody, 112 Carriers (1905), § 112. 

Ala. 267, 20 So. 480, 57 Am. St. ZZ; "Handford v. Palmer, 2 Brod. & 

Bradley v. Cunningham, 61 Conn. Bing. 359; Eastman v. Sanborn, 3 

485, 23 Atl. 932, 15 L. R. A. 679; Allen (Mass.) 594, 81 Am. Dec. bll. 

Evans v. Nail, 1 Ga. App. 42, 57 S. ™ Jackson v. Robinson, 18 B. Mon. 

E. 1020; Union Stock Yards & Tran- (Ky.) 1. 

sit Co, V. Mallory &c. Co., 157 111. '" Harrington v. Snyder, 3 Barb. 
554, 41 N. E. 888; Duffy v. Howard, (N. Y.) 380; McNeill v. Brooks, 1 
n Ind. 182; Chamberlin v. Cobb, Yerg. (Tenn.) 773. 
32 Iowa 161 ; Taussig v. Schields, 26 ^ Overdriving and overheating, Ed- 
Mo. App. 318; Ouderkirk v. Central wards v. Carr, 13 Gray (Mass.) 



§ 3075 BAILMENTS. 308 

what he perceives to be the creature's frailties, nor fail to supply, 
prudently, wants essential to its health and good condition. If 
disease or bruise be discovered during the bailee's term, he should 
be discreet in its treatment, and in extremity call in some farrier 
or expert ;^^ or else, informing his bailor promptly, throw the 
responsibility, as he may generally do, upon the owner. He 
should not take dangerous risks of travel.^* During his whole 
term of use the bailee ought to act honorably, humanely, and 
with such reasonable regard for preserving the animal's value 
unimpaired as from prudent men might be expected." So when 
the bailee has fairly followed the terms of his engagement, and 
has used proper diligence, the bailor must bear all loss occasioned 
to the animal in the course of its use.^° And if he is ordinarily 
prudent and careful, the bailee is not liable for injuries caused by 
the horse's nervous or vicious nature."" If the letter knows that 
the hirer is physically or mentally incapable of giving proper 
care, as a young child, or an imbecile or cripple, he cannot hold 
him to the same degree of care as a normal person." But since 
in this class of cases, personal use by the hirer is not ahvays con- 
templated, it is held that the bailor may rely upon the bailee's 
pecuniary responsibility to make good any injury which might 
occur. ^* A hirer who knows that the thing hired is liable to de- 
terioration or injury must exercise commensurate diligence. ^° 
Inevitable accident or superior force excuses the bailee from lia- 
bility for loss,"" or natural deterioration or wear and tear incident 

234; Buis v. Cook, 60 Mo. 391 ; Went- P. R. Co., 45 Minn. 85, 47 N. W. 459; 

worth V. McDuffie, 48 N. H. 302; Stacy v. Knickerbocker Ice Co., 84 

Rowland v. Jones, 73 N. Car. 52 ; Wis. 614, 54 N. W. 1091, 

Ray V. Tubbs, 50 Vt. 688, 28 Am. " Schouler Bailments (3d ed.), 

Rep, 519. § 138. 

'"Story Bailments (9th ed.), § 405; "" Schouler Bailments (3d ed.), 

Bray v. Mayne, 1 Gow. 1 ; Deane v. § 138 ; Mooers v. Larry, IS Gray 

Keate, 3 Camp. 4; Vaughan v. Web- (Mass,) 451, 

ster, 5 Harr, (Del,) 256; Thompson '° Beale v. South Devon R, Co., 12 

V. Harlow, 31 Ga. 348;' Graves v. W. R. 1115; Wilson v. Brett, 11 M. 

Moses, 13 Minn, 335, & W, 113, 

"Such as trying to ford a swollen ™Watkins v. Roberts, 28 Ind, 167; 

stream. United Tei, Co. v. Cleve- Field v, Brackett, 56 Maine 121 ; Mc- 

land, 44 Kans, 167, Evers v. The Sangamon, Z2 ?\Io. 187 ; 

=' Francis v. Shrader, 67 111. 272; Hyland v. Paul, 33 Barb. (N, Y,) 

Buis V, Cook, 60 Mo, 391 ; Harring- 241 ; Reeves v. The Constitution, 

ton V, Snyder, 3 Barb, (N, Y.) 380; Gilp, (U, S,) 579, Fed Cas, 11659, 
Carrier v, Dorrance, 19 S, Car, 30, 

™ Armstrong v, Chicago, M. & St. 



309 CONTRACTS OF HIRING. § 3076 

to the use of the thing,'^ the sickness and death, or the escape, of 
a hired animal,'^ or loss by robbery or theft,^^ unless the bailee's 
negligence has exposed the property to injury, or contributed 
thereto.'* 

It seems that the proper rule in regard to expenses is that the 
bailee is liable for the ordinary and incidental expenses of caring 
for the property,''* such as providing suitable food for horses,'" 
and that the bailor is liable for unforeseen extraordinary expense 
incurred in preserving the property from loss from unexpected 
causes for which the hirer was not at fault, or which permanently 
enhance its value.'' Under the civil law the letter must put the 
chattel in proper condition for use, and keep it so, but the text- 
writers do not consider this the rule at common law." 

§ 3076. Bailee's misuse and conversion. — If the bailee in 
any way uses the property for any other purpose than that per- 
mitted by the contract of bailment, he is, of course, liable in 
breach of contract for any damages thus caused. But the early 
cases hold that any intentional deviation in use from the agreed 
purpose is a conversion, and that the bailee thenceforward be- 
comes absolutely liable for any loss or injury to the property. 
This rule has been frequently applied in cases where a horse was 
killed or injured when driven or ridden to a place not provided 
for in the contract of hire," and the bailee held liable for con- 

^ Francis v. Shrader, 67 111. 272; Mo. 391; Wentworth v. McDuffie, 48 

Buis V. Cook, 60 Mo. 391 ; Millon v. N. H. 402. The bailee of a horse and 

Salisbury, 13 Johns (N. Y.) 211 ; wagon for hire is liable for the value 

Harrington v. Snyder, 3 Barb. (N. if they were stolen and he did not use 

Y.) 380; Reeves v. The Constitution, reasonable care to keep watch over 

Gilp. (U. S.) 579, Fed. Cas. No. the property. Kleiner v. Cohn, 132 

116S9. N. Y. S. 779. 

='Watkins v. Roberts, 28 Ind. 167. ''Schouler Bailments (3d ed.), § 

But the hirer of a horse which dies 152; Hale Bailments, p. 201. 

from a disease contracted while at '° Handford v. Palmer, 2 Brod. & 

the work for which it was hired and Bing. 359, 5 Moore 74. 

while under his exclusive protection " Schouler Bailments (3d ed.), § 

has the burden of proving that such 152; Story Bailments (9th ed.), § 

death was not caused by his negli- 392; Reading v. Menham, 1 Moo. & 

gence. Selesky v. Vollmer, 107 App. Rob. 234; Leach v. French, 69 Maine 

Div. (N. Y.) 300, 95 N. Y. S. 130. 389, 31 Am. Rep. 296; Harrington v. 

■^ Story Bailments (9th ed.), § 412; Snyder, 3 Barb. (N. Y.) 380; Jones 

Campbell v. Klein, 101 N. Y. S. 577. v. Morgan, 90 N. Y. 4, 43 Am. Rep. 

'"Schouler Bailments (3d ed.), § 131. 

134; Eastman v. Sanborn, 3 Allen °°Schouler Bailments (3d ed.), § 

(Mass.) 594; Edwards v. Carr, 13 152; Hale Bailments, p. 201. 

Gray (Mass.) 234; Buis v. Cook, 60 ""Malone v. Robinson, 77 Ga. 719; 



§ 3076 BAILMENTS. 3IO 

version if he rides or drives a horse beyond the agreed place, or 
farther than the agreed distance/" or keeps him longer than the 
agreed time/^ or hires him for one purpose or to do one kind of 
work, and uses him to do another kind of work/^ The tendency 
of the later cases and text-writers has been to relax the rule some- 
what, Judge Story suggesting that the bailee should not be held 
liable for conversion if the violation of duty or of contract did 
oot conduce to the loss, and following this line, it has been held 
that merely taking slaves to work in another county from that 
specified is not ipso facto a conversion where the loss was not 
occasioned by such act, and there was no intention to do any- 
thing inconsistent with the owner's right,*^ and that merely driv- 
ing a team beyond the agreed place, without more, is not a con- 
version.** Other cases have held that where the injury was not 
received while the horse was being used without the limits of 
the hiring, and was not caused by such use, there is no conver- 
sion.*° 

The true test of a conversion is "in an illegal control of 
the thing converted, inconsistent with the plaintiff's right of 
property."*' And as Mr. Schouler says, "The leaven of com- 
mon sense, which keeps our law in constant ferment, is here at 

Homer v. Thwing, 3 Pick. (Mass.) 45 Mo. App. 332; DeVoin v. Mich- 

492; Hall v. Corcoran, 107 Mass. 251, igan Lumber Co., 64 Wis. 616, 25 N. 

9 Am. Rep. 30; Martin v. Cuthbert- W. 552, 54 Am. Rep. 649. One who 

son, 64 N. Car. 328; Broussard v. hires horses to draw castings along a 

Sells-FIoto Show Co. (Tex. Civ. public road does not convert a team 

App.), 128 S. W. 439. See Palmer by unhitching it from the wagon in 

V. Mayo, 80 Conn. 353, 68 Atl. 369, which it is working, and hitching it 

125 Am. St. 123, 15 L. R. A. (N. S.) to one of his own which is stalled 

428, 12 Am. & Eng. Ann. Cas. 691. on the road, to assist in getting it 

*" Welch V. Mohr, 93 Cal. 371; Mur- out. Weller v. Camp, 169 Ala. 275, 

phy V. Kaufman, 20 La. Ann. 559; 52 So. 929, 28 L. R. A. (N. S.) 

Morton v. Gloster, 46 Maine 520; 1106n. 

Perham v. Coney, 117 Mass. 102; "Harvey v. Epes, 12 Grat. (Va.) 

Fisher v. Kyle, 27 Mich. 454; Dis- 153. 

brow V. Tenbroeck, 4 E. D. Smith "Doolittle v. Shaw, 92 Iowa 348, 

(N. Y.) 397. See Carney v. Rease, 60 N. W. 621, 26 L. R. A. 366 and 

60 W. Va. 676, 55 S. E. 729. note, 54 Am. St. 562; Carney v. 

"Stewart v. Davis, 31 Ark. 518; Rease, 60 W. Va. 676, 55 S. E. 729. 
Whalen v. New York &c. Electric "^ Farkas v. Powell, 86 Ga. 800, 13 

Co., 63 App. Div. (N. Y.) 615, 71 S. E. 200, 12 L. R. A. 397; Rankin 

N. Y. S. 593 ; Martin v. Cuthbertson, v. Shephardson, 89 111. 445 ; Lovejoy 

64 N. Car. 328. v. Jones, 30 N. H. 164; Johnson v. 

" Cartlidge v. Sloan, 124 Ala. 596, Miller, 16 Ohio 431. 
26 So. 918 ; Ledbetter v. Thomas, 130 " Woodman v. Hubbard, 25 N. H. 

Ala. 299, 30 So. 342; Fox v. Young, 67. 
22 Mo. App. 386; Kellar v. Garth, 



311 CONTRACTS OF HIRING. § 3076 

work, recalling the injustice of visiting blameworthy and blame- 
less deviation with the same penalties of absolute or insurance 
accountability. One hires a horse for a given journey, but unex-> 
pectedly encounters a friend, and turns off to visit him, using, 
all the while, a prudent care of the animal ; or he finds obstruc- 
tions in the road, and changes the point of destination to another 
which must have equally suited his bailor, or he misses his way. 
Such instances are matters of every-day occurrence. And how 
few who hire a carriage and drive carefully believe themselves 
tied down to a literal performance, irrespective of all emergencies 
which may possibly occur too far off for consulting the bailor. 
How few imagine that, for a little longer or a little different 
ride, they incur an extra risk, beyond that of paying, possibly, 
an extra hire. * * * [A serviceable defense] lies in a just 
and reasonable interpretation of the bailment undertaking itself, 
which, if pursued with ordinary prudence, under all the circum- 
stances, ought not to be too literally construed against a bailee 
who may have found himself in some unforeseen emergency, 
and, while far from the bailor, obliged to act upon his own judg- 
ment. For one who hires may be presumed to have much lati- 
tude, as to time and methods of enjoyment ; and local usage and 
the good sense of the contract should interpret favorably, where 
restrictive use was not clearly specified. If hiring be general, 
any prudent use of the thing is permissible; and even if it be 
particular, terms not fairly meant for exclusion need not warp 
the hirer's discretion, if he is prepared to pay a reasonable com- 
pensation according to his use ; and more especially so where an 
exigency happens which calls for the exercise of a discretion on 
his part without consulting the bailor."*' The foundation of 
the liability in cases where the bailee is held guilty of a con- 
version is rather in tort than in contract, therefore it is no defense 
to the bailee that the contract of hiring is void because made on 
Sunday,*^ or voidable because the bailee is an infant.*® The de- 

"Schouler Bailments (3d ed.), '^ Homer v. Thwing, 3 Pick. 

§§ 140-141; Weller v. Camp, 169 Ala. (Mass.) 492; Freeman v. Boland, 14 

275, 52 So. 929, 28 L. R. A. (N. S.) R. I. 39, 51 Am. Rep. 340; Towne 

1106n. V. Wiley, 23 Vt. 355, 56 Am. Dec. 85; 

"^See Frost v. Plumb, 40 Conn. Ray v. Tubbs, 50 Vt. 688, 28 Am. 

Ill, 16 Am. Rep. 18; Hall v. Cor- Rep. 519. 
coran. 107 Mass. 251, 9 Am. Rep. 30. 



§ 3077 BAILMENTS. 312 

struction of personal property under hire by the bailee amounts 
to a conversion/" 

§ 3077. Third persons and subusers. — The bailee, since he 
holds a special property in the thing hired, may bring an action 
against any person who injures it or interferes tortiously with 
his possession, during the time his right exists/^ The bailor, 
having the general property, is not bound to look to the bailee 
alone, but has the same right as the bailee to bring an action 
against a third party,^^ with the exception that if the hiring is 
for a term specified, the letter may not bring trover or replevin 
until the expiration of the term,"' but may sue for an injury to 
the reversion.^* The negligence of a bailee for hire is not im- 
putable to the bailor in an action by the bailor against a third 
person for an injury to the property, and he may recover from a 
third person whose negligent or wrongful act caused the destruc- 
tion or injury of the bailment, even though the bailee's negligence 
was contributory to the loss/'' In this latter instance, the bailor 
may have a right of action when the bailee would have none. 
The converse of this proposition is true, that the bailor is not 
liable to third persons for the negligence of the bailee, his serv- 
ants or agents. °^ The bailee is liable to the bailor not only for 

■" Kiskadden v. United States, 44 Conn. 383, 71 Atl. 356; Sea Ins. Co. 

Ct. CI. (U. S.) 20s. V. Vicksburg &c. R. Co., 159 Fed. 

°^ Croft V. Alison, 4 Barn. & Aid. 676, 86 C. C. A. 544, 17 L. R. A. (N. 

590; McGill V. Monette, 37 Ala. 49; S.) 925; Welty v. Indianapolis & V. 

Ludden v. Leavitt, 9 Mass. 104, 6 R. Co., 105 Ind. 55, 4 N. E. 410; 

Am. Dec. 45; Rindge v. Inhabitants Kellar v. Shippee, 45 III. App. ill; 



of Coleraine, 11 Gray (Mass.) 157 
Bliss V. Schaub, 48 Barb. (N. Y.) 
339; Hopper v. Miller, 76 N. Car. 
402. 

"'Gordon v. Harper, 7 T. R. 9 
Pain V. Whittaker, Ryan & M. 99 



Jersey Electric R. Co., 60 N. J. L. 
338, 38 Atl. 828, afifd. 61 N. J. L. 
287, 41 Atl. 1116, 43 L. R. A. 849. 

''"Clarke v. Poozer, 2 McMul. (S 
Car.) 434; Swift v. Moseley, 10 Vt. 



Illinois Cent. R. Co. v. Sims, 11 Miss. 
325, 27 So. 527, 49 L. R. A. 322 ; New 
Jersey Electric R. Co. v. New York 
L. E. & W. R. Co., 61 N. J. L. 287, 
41 Atl. 1116, 43 L. R. A. 849; Puter- 
baugh V. Reasor, 9 Ohio St. 484; 



New York, L. E. & W. R. Co. v. New Gibson v. Bessemer &c. R. Co., 226 



Pa. St. 198, 75 Atl. 194, 18 Am. & 
Eng. Ann. Cas. 535. 

""Claypool V. McAllister, 20 111. 
504 ; Sproul v. Hemmingway, 14 Pick. 
(Mass.) 1, 25 Am. Dec. 350n; Hofer 



208, 33 Am. Dec. 197. v. Hodge, 52 Mich. 372, 18 N. W. 112, 

"Schouler Bailments (3d ed.), § SO Am. Rep. 256; Carter v. Berlin 

154; Howard v. Parr, 18 N. H. 457; Mills Co., 58 N. H. 52, 42 Am. Rep. 

White V. Griffin, 4 Jones (N. Car.) 574; Schular v. Hudson River R. Co., 

139. 38 Barb. (N. Y.) 653. 
"* Currie v. Consolidated R. Co., 81 



313 CONTRACTS OF HIRING. § 3O77 

his own negligence or default, but for the default or negligence 
of his servants or children in regard to the thing hired." The 
reason is that there is no privity between the bailor and those to 
whom the bailee permits the enjoyment of the property, therefore 
the bailor must look to the bailee. The rule was applied where 
a servant of the hirer rode a horse to death, or left a stable door 
open and allowed it to escape,''* where the servants, guests, chil- 
dren and boarders of the hirer defaced the furniture in ready-fur- 
nished lodgings,^' or is applicable generally in any instance where 
subagents employed by the hirer negligently injure the property."" 
The liability rests, however, rather on the principle of agency than 
that of master and servant. It seems that the better rule is that 
the master is liable, not merely for the acts of the servant within 
the scope of his authority, but also for those which are within 
the course of his employment, even though the particular act may 
be unauthorized."^ But where one let a brougham and a coach- 
man to drive it, the owner of the brougham was not liable for a 
theft of the traveler's goods, which were silversmith's samples, 
committed by the coachman, for such an act was without the 
course of his employment."^ The bailee's liability rests upon the 
ground that he acts through instrumentalities when he acts 
through servants, guests, children or subagents, and that one who 
sets in motion an instrumentality animate or inanimate, rational 
or irrational, which injures another is liable."' Necessarily, the 
bailee is liable to third persons under the ordinary rules apply- 
ing to agents and servants, and the bailor who sends a servant 

"Story Bailments (9th ed.), § 401; Nev. & P. 239, 8 Adol. & E. 109; 

2 Kent Coram. (4th ed.), 586, 587; Bush v. Steinman, 1 Bos. & P. 409; 

Hale Bailments, p. 204 et seq. ; Hilliard v. Richardson, 3 Gray 

Schouler Bailments (3d ed.), §§ 145, (Mass.) 349, 63 Am. Dec. 743; Hall 

146. V. Warner, 60 Barb. (N. Y.) 198; 

"'Jones Bailments, 89; 1 Black. Mims v. Mitchell, 1 Tex. 443. 

Comm. 430, 431; Coggs v. Bernard, "Note, Jag. Torts, 239-280; Hale 

2 Ld. Raym. 909; Salem Bank v. Bailments, p. 207; Mallach v. Rid- 

Gloucester Bank, 17 Mass. 1, 9 Am. ley, 47 Hun (N. Y.) 638, 24 Abb. N. 

Dec. 111. Cas. (N. Y.) 172, 181, IS N. Y. St. 

=» Jones Bailments, 89; Story Bail- 4, 9 N. Y. S. 922. 

ments (9th ed.), § 400; Schouler =' Cheshire v. Bailey (1905), 1 K. 

Bailments (3d ed.), §§ 145, 146; Smith B. 237, 1 Am. & Eng. Ann. Cas. 94 

V. Bouker, 49 Fed. 954, 1 C. C A. 481. and note. 

™ Schouler Bailments (3d ed,), ""Hale Bailments, p. 208, citing 

§1 145, 146; Story Bailments (9th Innes, Torts; Schouler Bailments (3d 

ed.), § 401; Randleson v. Murray, 3 ed,), § 146. 



§ 3°78 BAILMENTS. 3I4 

to care for the thing hired is Hable for the acts of such servant 
not outside of the course of his employment.'* If two persons 
jointly hire a thing for use, either is liable for the negligence or 
misconduct of the other resulting in its injury.*^ 

§ 3078. Assignability of bailee's rights. — The bailee at will, 
where either party may at his pleasure terminate the bailment, 
and the bailee in whom the bailment is a personal trust, have no 
assignable interest in the chattel whose use is bailed to them for 
hire, and any assignment by them passes no interest, but instead 
terminates the bailment, authorizing the owner to bring an ac- 
tion in trover or conversion. °' But in certain circumstances 
where there is no personal confidence it would be entirely in ac- 
cord with the purpose of the bailment that the hirer should as- 
sign his interest, as where property is leased for a number of 
years with the use of the furniture or of farm implements and 
stock, in which case the lessee, unless forbidden by his contract, 
may sublet, and assign his right to the use of the chattels.'^ 

§ 3079. Special classes of hiring the use of a thing — Prop- 
erty for exhibition. — Where a general or special invitation is 
given to persons to deliver articles to a corporation or association 
or another person for the purpose of exhibition in public, to be 
redelivered after the exhibition, the bailment is one of hire, since 
both parties receive a benefit, and the invitation and the placing 
of the articles in the care of the exhibitor form a sufficient con- 
sideration, so that the bailee is held to ordinary care.°^ 

"See notes 61 and 62. 44 Maine 491, 69 Am. Dec. 118; Bai- 

°°Davey v. Chamberlain, 4 Esp. ley v. Colby, 34 N. H. 29, 66 Am. 

229; O'Brien v. Bound, 2 Speers (S. Dec. 752. 

Car.) 495, 42 Am. Dec. 384. Where "Day v. Bassett, 102 Mass. 445; 
one hires a horse and the other rides Vincent v. Cornell, 13 Pick. (Mass.) 
as a passenger or friend, and takes 294, 23 Am. Dec. 683; Bailey v. Col- 
no part in the control, the hirer only by, 34 N. H. 29. 

is responsible (Dyer v. Erie R. Co., ™ Prince v. Alabama State Fair, 106 

71 N. Y. 228), but if the other abets, Ala. 340, 17 So. 449, 28 L. R. A. 716; 

both are liable. Banfield v. Whipple, Vigo Agricultural Society v. Brum- 

10 Allen (Mass.) 27, 87 Am. Dec. fiel, 102 Ind. 146, 1 N. E. 382, 52 Am. 

618. Rep. 657. And see Smith v. Minne- 

" Russell V. Favier, 18 La. 585, 36 apolis Library Board, 58 Minn. 108, 

Am. Dec. 662; Crocker v. GuUifer, 59 N. W. 979. 



315 CONTRACTS OF HIRING. § 3080 

§ 3080. Special classes — Storekeeper or bath-house keeper 
as hired bailee of personal belongings of customer or patron. 

— A bailment is for hire, even though no direct hire is paid for 
the bailment, where it is a necessary incident of a business in 
which the bailee makes a profit. "" This rule was applied where 
the proprietor of a bath-house invited its patrons, when they pur- 
chased tickets entitling them to a bath, to place their valuables 
in a box, the key to which was given to the patron, and while 
a patron was bathing, the key was taken by a trespasser from the 
pocket of his clothing hanging in the dressing room, and turned 
in to the attendant, who delivered a gold watch and money to 
the holder of the key, and it was held that the proprietor was 
liable for the loss of the goods, which had been caused by want of 
ordinary care for their preservation.'" The same rule is applied 
where one who goes into a retail clothing store to purchase cloth- 
ing is invited by a salesman to place his valuables in a certain 
place, or to lay his clothing in a certain place, while trying on 
garments, and it is necessary and usual for certain articles of 
clothing to be removed when trying on others, or for an article 
such as a watch to be removed from the person, and through 
want of ordinary care on the part of the proprietor of the store 
or his clerk, the articles of clothing or valuables laid aside, or 
valuables contained in the pockets of these articles, are taken, the 
proprietor is held liable for the loss.'^ But where a customer, 
knowing that the clerks are busy, proceeds to wait on himself, 
and without express or implied invitation lays aside his coat and 
vest to try on garments, knowing that no clerk is there to watch 
them, and the garments are stolen when there is no one but 
himself to watch them, he can not hold the proprietor of the 
store liable." This might perhaps be considered as the hiring of 

™ See cases cited in notes 70 and 71. "Delmour v. Forsythe, 128 N. Y. S. 

™Tombler v. KeoUing, 60 Ark. 62, 649; Bunnell v. Stern, 122 N. Y. 539, 

28 S. W. 795, 27 L. R. A. 502, 46 Am. 25 N. E. 910, 10 L. R. A. 481, 19 Am. 

St. 146- Walpert v. Bohan, 126 Ga. St. 519, rehearmg denied, 26 N. E. 

532, 55 S. E. 181, 8 Am. & Eng. Ann. 758 ; Woodruff v. Painter, 150 Pa. 

Cas. 89, 6 L. R. A. (N. S.) 828, 115 St. 91, 24 Atl. 621, 16 L. R. A. 451, 

Am. St. 114; Sulpho-Saline Bath 30 Am. St. 786. 

Co. V. Allen, 66 Nebr. 295, 92 N. W. "Wamser v. Brownmg, Kmg & 

354, 1 Am. & Eng. Ann. Cas. 21; Co., 187 N. Y, 87, 79 N. E. 861, 10 

Levy V. Appleby, 1 City Ct. (N. Y.) L. R. A. (N. S.) 314n. 
252. 



§ 308l BAILMENTS. 316 

the custody of an article by the bailor, yet upon reflection it is 
seen that the bailment may be said to be primarily for the benefit 
of the merchant or bath-house keeper, who has impliedly invited 
the bailee to enter his establishment, and in order to make his 
place of business more attractive, has assumed the care of his 
belongings. A railroad company which maintains a parcel room 
where it receives and checks property for safekeeping to be re- 
delivered at such room, for which secvices it makes a nominal 
charge, is a bailee for hire as to the goods checked, and not a 
gratuitous bailee, the transaction being one of mutual benefit, and 
the railroad company must take ordinary care of the property, 
and is liable for ordinary negligence.''^ 

§ 3081. Termination of the contract of hiring — Redelivery 
and recompense. — The general principles in regard to the ter- 
mination of a bailment, as heretofore discussed, apply. The 
bailee's conversion of the articles bailed puts an end to the rela- 
tion and makes him absolutely liable. Destruction of the chattel 
before the completion of the bailment purpose also terminates 
the bailment. The bailee's duties upon the fulfilment of the use 
for which the thing was hired are to redeliver it to the letter, 
and to make to him recompense for its use, if this has not been 
done before.'* His duties as to both of these may be very much 
dependent upon the contract agreement. In general the thing is 
to be restored in as good condition as when received, with the ex- 
ception of losses caused by ordinary wear and tear, losses caused 
by inevitable accident or superior power, and losses which have oc- 
curred without culpable negligence or misconduct on the bailee's 
part." However, though a bailee in a contract of hiring is by 
law held only to a reasonable care, he may enter into such a con- 
tract so that he will become the insurer of the safety of the prop- 

"Fraam v. Grand Rapids &c. R. " Schouler Bailments (3d ed.), 

Co., 161 Mich. 556, 126 N. W. 851, 29 §§ 158-160; Hale Bailments, pp. 209, 

L. R. A. (N. S.) 834, and note, 21 210; Goddard Bailments, § 124. 

Ann. Cas. 96, and note. See also, "See § 3076; Schouler Bailments 

holding a railroad company liable as (3d ed.), § 159. As to redelivery af- 

a warehouseman in such a case, Terry fected by contract, see Walker v. Be- 

V. Southern R. Co., 81 S. Car. 279, ment (Ind. App.), 94 N. E. 339; 

62 S. E. 249, 18 L. R. A. (N. S.) Colorado &c. Tramway Co. v. Mont- 

295n